Skip to main content

Pound strengthened.

UK gilt yields fell, and the pound strengthened this morning after Boris Johnson announced that he would not enter the contest to become the next prime minister.

This, as well as fears that the contest could delay the October 31 fiscal statement, led to a sell-off in gilts on Friday. Consequently, this morning buyers returned to the market expecting that the former chancellor Rishi Sunak would become prime minister, lifting yields across short, medium and long-date gilts. These long-dated gilts were at the centre of the turmoil following the mini-budget that prompted the Bank of England to intervene to steady the market. As a result, the pound, which fell as low as $1.03 against the dollar in the days after the mini-budget, strengthened this morning to $1.1330, up 0.26 per cent.

The index slid 24 points, or 0.3 per cent, to 6945.72. The more UK-focused FTSE 250 rose 62 points, or 0.4 per cent, to 17,268.70.

Labels:

Comments

  1. Aaliyah30 October 2022 at 12:21

    Rishi Sunak is a wealthy man who doesn't know what it means to be poor and doesn't understand how most UK citizens are living or thinking. This is not a good match and I don't see him doing a good job.

    ReplyDelete
  2. Logan3 November 2022 at 08:48

    It's good that Boris Johnson is out of the picture as that wouldn't have been a good idea at all. Will Sunak be better than Truss? Who knows? He might last longer than her since that's not very hard to do but whether he has what it takes to handle these hard times remains a mystery.

    ReplyDelete

Post a Comment

Cloud Bookkeeping

US FED rate rise.

  The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...
Post a Comment
Read more

EU business slide.

  S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, fell 1 point to 47.1, figures showed yesterday. That is its lowest level since November 2020 and the fourth consecutive month below the crucial 50 mark separating growth from contraction. One of the few bright spots in the survey was that companies in all sectors reported a slight easing of cost pressures, price growth and supply chain constraints. However, prices charged for goods and services still rose at the sixth fastest rate since such data started in 2002. Jobs growth increased marginally from October but remained low compared with the past 18 months. Following a few months of falling price pressure in manufacturing and services, the October print shows an overall stabilisation said Jens Eisenschmidt, chief European economist at Morgan Stanley. However, German businesses, at the hub of Europe’s energy crisis, reported that manu...
1 comment
Read more

Tariffs on UK electric cars.

  The European Commission has confirmed that it will continue with its plan to impose tariffs on electric cars exported between the UK and EU starting next year. This is due to the "rules of origin" requirement that mandates EVs traded across the English Channel to have 60% of their battery and 45% of their parts sourced from the EU or UK or face a 10% tariff. A senior Commission official, Richard Szostak, recently informed parliamentarians from the UK and EU that the bloc's battery investment has significantly declined, making the tariffs necessary to encourage domestic production. In 2022, the EU's share of global investment in battery production shrank from 41% to only 2% after the US offered substantial subsidies through its Inflation Reduction Act. Starting in 2024, car manufacturers in the UK will need to have 22% of their sales come from zero-emission vehicles, which means they may need to import EVs from the continent to meet this requirement. If EU carmakers ...
Post a Comment
Read more