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☆ Britain’s New Chancellor Says Some Taxes Will Rise
▼ + stars: | 2022-10-15 | by ( Max Colchester | Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—The U.K.’s new chancellor, Jeremy Hunt , effectively scrapped Prime Minister Liz Truss ’s signature tax-cutting plan, saying on Saturday that some levies would have to rise and public-spending cuts would need to be made to restore market confidence in the British economy. Mr. Hunt said that Ms. Truss had made mistakes with her plan to boost growth by borrowing money to fund the biggest tax cuts since the 1970s, measures that spooked the markets and sent the Conservative Party crashing in the polls.

☆ New U.K. Chancellor Jeremy Hunt Seen as Moderate in Bid to Appease Markets
▼ + stars: | 2022-10-14 | by ( Max Colchester | Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON— Jeremy Hunt , a quietly spoken veteran Conservative lawmaker, is now the U.K. Chancellor of the Exchequer, given the difficult job of trying to restore the British government’s credibility with investors after weeks of political chaos. Prime Minister Liz Truss on Friday called Mr. Hunt “one of the most experienced and widely respected government ministers and parliamentarians” after firing her longtime allyKwasi Kwarteng from the treasury role.

LONDON—The Bank of England said Wednesday that its program of bond purchases to support pension funds and prevent a potential financial market crisis would end Friday as planned, causing a fresh bond selloff and setting the stage for a tense few days on U.K. markets. The move was seen by investors as a strong signal by the central bank and Gov. Andrew Bailey that its priority remains fighting inflation, even if that raises the likelihood of deeper turmoil in U.K. financial markets in the coming days and weeks, jitters that have also hit some U.S. markets such as junk bonds.

☆ BOE Adds Index-Linked Gilts to Bond Purchase Program
▼ + stars: | 2022-10-11 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

The Bank of England added inflation-linked government bonds to its program of bond purchases after a fresh attempt to extend support to pension funds failed to assuage worried investors. The central bank on Tuesday said it would buy up to £5 billion of index-linked gilts each day through Friday, equivalent to $5.5 billion. On Monday, the bank doubled the total daily amount of bonds it could buy to £10 billion.

LONDON—The Bank of England extended support targeted at pension funds for the second day in a row, the latest attempt to contain a bond-market selloff that has threatened U.K. financial stability. The central bank on Tuesday said it would add inflation-linked government bonds to its program of long-dated bond purchases, after an attempt on Monday to help pension funds failed to calm markets.

☆ Nobel Prize in Economics Winners Include Former Fed Chair Ben Bernanke
▼ + stars: | 2022-10-10 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

The winners of the Nobel Prize in Economic Sciences were announced Monday in Stockholm. The Nobel Prize in Economic Sciences was awarded Monday to former Federal Reserve chief Ben Bernanke and two other U.S. academics whose work helped governments and central bankers navigate the global financial crisis and avoid an economic depression of the kind seen during the 1930s. Mr. Bernanke, who served as chairman of the Fed during the crisis, is currently a distinguished senior fellow at the Brookings Institution. His fellow recipients are Douglas Diamond, an economist at the University of Chicago, and Philip H. Dybvig, an economist at Washington University.

☆ Bank of England Offers Further Support for Pension Funds Amid Crisis
▼ + stars: | 2022-10-10 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—The Bank of England on Monday offered to buy long-dated U.K. government bonds in larger amounts and said it would provide continuing support to pension funds that have been at the heart of the U.K.’s bond-market crisis. On Sept. 28 the U.K.’s central bank launched a series of auctions in which it offered to buy £5 billion of long-dated gilts, as U.K. government bonds are known, equivalent to $5.5 billion. The program was aimed to stanch the damage from a furious selloff in U.K. government debt over previous days in the aftermath of a surprise package of tax cuts announced by the government.

LONDON—A crisis in U.K. government debt markets accelerated after a fresh attempt by the Bank of England to extend support to pension funds failed to assuage worried investors. The U.K.’s central bank said Monday that it would increase the daily amounts it was willing to buy in long-dated bonds before ending the program it established last month as scheduled on Friday. It also unveiled two types of lending facilities aimed at freeing up cash for pension funds beyond the end of the bond buying.

☆ U.K. Prime Minister Defends Tax Cuts as Market Turmoil Continues
▼ + stars: | 2022-09-29 | by ( Max Colchester | Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—Prime Minister Liz Truss looked to reassure the British public and rattled investors that her plan to cut taxes wouldn’t lead to prolonged financial instability, arguing in a series of interviews on Thursday that the country had been buffeted by global shocks rather than her government’s reforms and that her policies would result in faster growth. “We had to take decisive action,” Ms. Truss told the British Broadcasting Corp. in her first public comments since the tax plan was presented last Friday. The new prime minister said she wouldn’t backtrack on plans to carry out big tax cuts and spending increases, a package funded by borrowing which raised alarm among investors.

The U.K. continued to try to stave off a financial and economic crisis on Wednesday as the country’s central bank carried out emergency buying of government bonds to stabilize a spiraling debt market, adding pressure on the government of new Prime Minister Liz Truss . The central bank’s surprise move to spend 1 billion pounds buying U.K. government debt spurred a rally in the bond market, and helped the embattled pound gain slightly against the U.S. dollar, though it was still down against the euro. But the intervention—to stave off an imminent pension crisis—underscored the risks that continuing market turbulence poses to the U.K. financial system and economy.

☆ Bank of England to Buy Bonds in Bid to Stop Spread of Crisis
▼ + stars: | 2022-09-28 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—The Bank of England on Wednesday said it would buy U.K. government bonds with long maturities “on whatever scale is necessary” in an effort to restore order to the market after a large set of government tax cuts sent borrowing costs soaring. The move caused an immediate reaction, with bond prices both in the U.K. and other markets rallying, sending yields lower. The U.K.’s benchmark 10-year government bond yields fell to 4.004% after the announcement, from 4.552% before, an outsize move for what is normally a staid corner of the market. The pound rallied at first against the dollar but then slid further to trade down around 0.6% to $1.066.

☆ U.K. Seeks to Calm Investors Over Clash Between Inflation Fight and Truss Tax Cuts
▼ + stars: | 2022-09-27 | by ( Paul Hannon | Max Colchester | ) www.wsj.com time to read: 1 min

The U.K. government, after a punishing week for the pound and bond market in London, tried Tuesday to reassure investors that it is working to better coordinate with the Bank of England as Prime Minister Liz Truss ’s tax cuts and energy subsidies complicate efforts to control spiraling inflation. U.K. Chancellor of the Exchequer Kwasi Kwarteng said he was meeting Bank of England Governor Andrew Bailey daily.

☆ Bank of England Inflation Fight and Truss Tax Cuts Are at Odds, Worrying Investors
▼ + stars: | 2022-09-27 | by ( Paul Hannon | Max Colchester | ) www.wsj.com time to read: 1 min

This year, Andrew Bailey , the head of the Bank of England, has had one of the toughest jobs in central banking. The energy price shock from the Ukraine war and a U.S.-style labor shortage has sent U.K. inflation to the highest rate of large rich countries. Now, his job of fighting inflation has become even harder after the new government of Prime Minister Liz Truss unveiled the biggest tax cuts in a generation, as well as a bailout for consumers and businesses designed to protect them from surging energy costs, according to former central bank officials, analysts and investors.

☆ Russia’s War in Ukraine to Cost Global Economy $2.8 Trillion, OECD Says
▼ + stars: | 2022-09-26 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Russia’s invasion of Ukraine will cost the global economy $2.8 trillion in lost output by the end of next year—and even more if a severe winter leads to energy rationing in Europe—the Organization for Economic Cooperation and Development said Monday. The estimate by the Paris-based club of advanced economies lays bare the magnitude of the economic fallout from Moscow’s invasion of its neighbor seven months ago, the worst military conflict on the continent since World War II, which is Russia’s attempt to redraw the map of Europe by force.

☆ Central Banks May Stoke Risks by Raising Interest Rates Together
▼ + stars: | 2022-09-25 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Central banks around the world are raising their key interest rates in the most widespread tightening of monetary policy on record. Some economists fear they may go too far if they don’t take into account their collective impact on global demand. According to the World Bank, the number of rate increases announced by central banks around the world was the highest in July since records began in the early 1970s. On Wednesday, the Federal Reserve delivered its third 0.75 percentage-point increase in as many meetings. This past week its counterparts in Indonesia, Norway, the Philippines, South Africa, Sweden, Switzerland, Taiwan and the U.K. also upped rates.

EuropeIAEA Director General Rafael Grossi said he remained gravely concerned about the situation at the nuclear plant, which sits close to the front line of the Ukraine war, urging the establishment of a safety zone around the site as soon as possible.

CommoditiesIndia banned exports of broken rice and levied a tax on other key varieties in a move that would add to global inflationary pressure and exacerbate food supply pains caused by the war in Ukraine.

☆ Global Economic Growth Is Weighed Down by Inflation, Rising Interest Rates
▼ + stars: | 2022-07-21 | by ( Paul Hannon | Austen Hufford | ) www.wsj.com time to read: 1 min

Fresh economic data pointed to a slowdown in U.S. and global growth, as higher prices and interest rates weigh on consumer demand, Europe enters a critical phase of its economic conflict with Russia, and China faces headwinds. U.S. and European business activity fell in October, according to new surveys released Monday. A sharp slowdown in services activity, the biggest driver of the world’s largest economy, led the U.S. decline.

☆ Europe’s Economy Contracts as Tough Winter Looms
▼ + stars: | 2022-07-21 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Business activity in Europe fell for a fourth straight month in October, according to new surveys, pointing to a potential slowdown in global economic growth as higher prices and interest rates weaken consumer demand. The surveys come as Europe enters a crucial phase of its economic conflict with Russia, which has been throttling energy supplies in response to sanctions for its war in Ukraine.

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