Pound selloff intensifies, government bond, FTSE rally fades after Liz Truss press conference – as it happened | Currencies
, 2022-10-14 02:00:00,
Government bond, FTSE rally fades, sterling slides after Truss speaks
Oh dear. Despite the climbdown on corporation tax, which the markets were expecting, Liz Truss failed to give the reassurances the public, MPs and investors were looking for.
The FTSE 100 index has now pared gains and is only 42 points ahead at 6,891, a 0.6% gain. The pound has dropped 1.2% to $1.1191.
Government bonds were rallying before the press conference, pushing yields sharply lower, but the yield on the 30-year gilt has since ticked up 5 basis points to 4.6% and the 10-year yield has risen to 4.2%. (This means government borrowing costs rise.)
The rise in corporation tax from 19p to 25p next April, originally announced by then-chancellor Rishi Sunak March and which Truss attacked during the leadership contest, will now go ahead in a dramatic U-turn. But Truss left many questions unanswered.
Tory MPs already texting to say they think that Liz Truss’s press conference has actually made things worse.
— Pippa Crerar (@PippaCrerar) October 14, 2022
An MP texts: “even by her standards that was really bad”
— Beth Rigby (@BethRigby) October 14, 2022
Key events
Closing summary
What a day…what a week!
The pound had slipped 0.5% this morning, then fell 1.2% after Kwasi Kwarteng was sacked as chancellor, as markets don’t like uncertainty. He had dashed back from the IMF meeting in Washington a day early, and Hargreaves…
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