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☆ UK PM Liz Truss fires her finance minister amid mounting political pressure and market chaos
▼ + stars: | 2022-10-14 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailUK PM Liz Truss fires her finance minister amid mounting political pressure and market chaosWilfred Frost, Sky News Anchor, joins 'Closing Bell' to discuss mounting pressure on UK Prime Minister Liz Truss to resign, the UK government's increased focus on monetary policy, and more.

London CNN Business —UK Prime Minister Liz Truss will hold a news conference Friday amid widespread speculation that she’s getting ready to ditch a big part of her economic strategy unveiled just three weeks ago. Kwarteng flew back from the IMF meeting in Washington, D.C., on Friday for discussions with Truss about the plan. Under pressure, Kwarteng has already brought forward his full budget statement to Oct. 31, more than three weeks earlier than planned. But investors may not be prepared to wait that long for reassurance about the state of Britain’s public finances. — Luke McGee and Zahid Mahmood in London, and Xiaofei Xu in Paris contributed to this article

London CNN Business —UK Prime Minister Liz Truss has fired finance minister Kwasi Kwarteng and ditched a big part of her discredited economic strategy in a desperate bid to rescue her month-old premiership. “It was right, in the face of the issues we had, that I acted decisively to ensure that we had economic stability,” Truss said Friday. Kwarteng presented a “mini budget” just three weeks ago, promising tax cuts worth £45 billion ($50 billion) and increased borrowing with the hope of boosting UK economic growth. “Liz Truss’ reckless approach has crashed the economy, causing mortgages to skyrocket, and has undermined Britain’s standing on the world stage,” he said. Kwarteng had flown back from the IMF meeting in Washington, D.C., overnight for discussions with Truss.

☆ Liz Truss was defeated by the bond market. Investors aren’t satisfied yet
▼ + stars: | 2022-10-14 | by ( Julia Horowitz | ) edition.cnn.com time to read: +5 min

London CNN Business —After a bruising three-week battle with bond markets, UK Prime Minister Liz Truss admitted defeat on Friday. The price of 30-year UK government debt, which has been whipsawed in recent weeks, fell after the press conference. The Bank of England was forced to announce three separate interventions to avoid a full-scale meltdown in the UK government bond market. That’s putting investors on edge, especially since more details on the revised Truss plan aren’t formally expected until Oct. 31. Global dynamics could also make it more difficult for UK markets to find their footing even as the government backtracks.

☆ The UK's recent market turmoil wasn't caused by the mini-budget, and the chaos was a result of interest rate 'differentials', Britain's business secretary says
▼ + stars: | 2022-10-12 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The turbulence in UK financial markets stems from the gap between UK and US interest rates, acob Rees-Mogg said Wednesday. The turbulence is "primarily caused by interest-rate differentials rather than by the fiscal announcement," he said. The fed funds rate in the US stands at 3%-3.25% and the UK's Bank Rate stands at 2.25%. "What has caused the effect in pension funds, because of some quite high-risk but low-probability investment strategies, is not necessarily the mini-budget. That decision was released after the Federal Reserve raised interest rates by a hefty 75 basis points, marking the third consecutive increase of that size, as it also battles inflation that's around a four-decade high.

☆ Putin's missile barrage on Ukraine showed weakness instead of strength, former speechwriter says. 'There's nothing else the army can do.'
▼ + stars: | 2022-10-11 | by ( Sinéad Baker | ) www.businessinsider.com time to read: +4 min

Putin's former speechwriter said Putin was trying to was trying to project strength. His assessment was that Putin's attacks were an attempt to demonstrate power to his internal critics, but ultimately backfired. A man runs after missiles hit central Kyiv, Ukraine on October 10, 2022. REUTERS/Gleb GaranichCars burn after Russian military strike, as Russia's invasion of Ukraine continues, in central Kyiv, Ukraine October 10, 2022. Russia's attacks on Monday did not appear hit any military targets.

☆ How West can mobilise trillions to help save Earth
▼ + stars: | 2022-10-10 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

LONDON, Oct 10 (Reuters Breakingviews) - War, inflation, debt, hunger, energy security and fear of recession will dominate the discussions at the annual meetings of the World Bank and International Monetary Fund this week. America and a group of other countries have given the World Bank until December to come up with a plan. Register now for FREE unlimited access to Reuters.com RegisterThe West has self-interested reasons to mobilise trillions of dollars to help the poorer nations of the so-called Global South transition from fossil fuels. But getting this money to flow to the Global South is tough because investors don’t think the returns on offer justify the risks. It is therefore encouraging that America and other leading shareholders have given the World Bank its marching orders and that Malpass has responded positively.

Bangkok, Thailand CNN —Thailand recoiled in horror Thursday after at least 36 people were killed, at least 24 of them children, in a massacre at a child care center in northeastern Thailand believed to be the country’s deadliest incident of its kind. Among the dozens of victims are Panya’s wife and stepson, whom investigators say he killed before taking his own life. “He also used a knife to stab both children and staff at the center,” Paisan said. Police General Damrongsak Kittiprapas said that the attacker “mainly used a knife” to kill the children. TPBS/ReutersMedics arrive at the child care center on Thursday, where more than 30 people, mainly children, were killed.

☆ Pension fund blowup faces brutal second act
▼ + stars: | 2022-10-06 | by ( Aimee Donnellan | ) www.reuters.com time to read: +5 min

The Bank of England announced a 65 billion pound gilt-buying scheme to stabilise markets and rescue pension funds. Bailey’s move may have been too late to stop some pension funds from having to close out their hedges, like interest rate swaps or futures. The rate at which retirement payments are discounted will also fall, pushing up the pension fund’s future liabilities, but without a corresponding asset gain. Meanwhile, investors like Goldman Sachs are hoovering up cut-price stakes in private equity vehicles, which LDI funds are selling. They also held 78 billion pounds and 317 billion pounds in property and equities respectively.

☆ Dollar dishes the pain as selloff rumbles on
▼ + stars: | 2022-09-29 | by ( Marc Jones | ) www.reuters.com time to read: +6 min

U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. "The market wouldn't mind some stability, it has become a little bit unpredictable," said Barings Investment Institute's Chief European strategist, Agnes Belaisch. "We are facing difficult economic times," Truss, who only took over as UK Prime Minister this month, said on local BBC radio. U.S. GDP fell at an unrevised 0.6% annualized rate last quarter, the government said in its third estimate of GDP. read moreRecession angst combined with supply issues and the strong dollar meant oil prices see-sawed after gaining more than $3 in the prior session.

☆ Dollar dishes the pain as new selloff takes hold
▼ + stars: | 2022-09-29 | by ( Marc Jones | ) www.reuters.com time to read: +4 min

The STOXX 600 share index (.STOXX) dropped nearly 2% from the open, while both the euro and the pound , hammered over the last week by UK debt concerns, slumped 1%. /FRXGovernment bond markets were braced for German data expected to show consumer prices rising there at the fastest rate since the 1950s. Gilt selling also resumed a day after the Bank of England dramatically intervened in the UK market to try and quell the storm around the government's spending plans. Reuters GraphicsBIT OF A MESSZooming back out, it was still about the dollar which has crushed currencies virtually everywhere this year. S&P 500 futures pointed to Wall Street falling more than 1.2% later with more Fed policymakers also due to speak.

☆ The UK is gripped by an economic crisis of its own making
▼ + stars: | 2022-09-29 | by ( Mark Thompson | ) edition.cnn.com time to read: +8 min

“While this is welcome, the fact that it needed to be done in the first place shows that the UK markets are in a perilous position,” said Paul Dales, chief UK economist at Capital Economics, commenting on the bank’s intervention. “It wouldn’t be a huge surprise if another problem in the financial markets popped up before long,” Dales added. The UK government should also postpone its tax cuts, El-Erian said. We look like reckless gamblers who only care about the people who can afford to lose the gamble,” one former Conservative minister told CNN. “Truss and Kwarteng are now facing a severe economic crisis as the world’s financial markets wait for them to make policy changes that they and the Conservative party will find unpalatable,” the Eurasia analysts wrote.

MUMBAI, Sept 29 (Reuters) - The Indian rupee is expected to open higher against the U.S. currency, after the Bank of England's decision to buy long-dated British bonds prompted a pullback in Treasury yields and the dollar index. The rupee is seen at around 81.60-81.65 per dollar in early trades, up from a record closing low of 81.94 on Wednesday. The dollar index tumbled on Wednesday, Treasury yields fell sharply and U.S. equities recovered after the BoE took measures to stop the rout in the U.K. bond market. The dollar index fell the most in more than two years on Wednesday, as risk aversion eased. The 10-year Treasury yield dropped to near 3.70%.

☆ London stocks slide as fiscal policy concerns weigh; Next drops
▼ + stars: | 2022-09-29 | by ( Johann M Cherian | ) www.reuters.com time to read: +2 min

The blue-chip FTSE 100 (.FTSE) was down 1.8%, while the more domestically-oriented FTSE 250 (.FTMC) shed 2.1%, by 0823 GMT. Shares of Next (NXT.L) slid 8.7% after it cut profit and sales forecasts, saying August trading was below expectations and cost of living pressures were set to rise in the coming months. It's indicative that the tighter monetary policy gets the far more damage it will do to UK consumers, UK spending and the UK economy." The FTSE 100 has lost 6.6% so far this year. Among other stocks, British American Tobacco (BATS.L) fell 3.1% in ex-dividend trading, while Synthomer (SYNTS.L) tanked 32.6% after it lowered its annual profit outlook.

☆ Morning Bid: Dysfunction and intervention
▼ + stars: | 2022-09-29 | by ( ) www.reuters.com time to read: +5 min

Amid all the chaos in British bond markets, the forced intervention by the Bank of England to buy gilts has given some investors a crumb of comfort about the limits of central bank tightening. Cold comfort maybe, but enough to drag bond yields back and lift stocks briefly around the world. While 30-year gilt yields steadied just below 4% on Thursday after their 100bp swoon the previous day, the pound was sliding again and UK midcap stocks dropped. read moreEasing inflation in Spain was better news read more . Market leader Inditex (ITX.MC), the owner of Zara, slipped 2.2%, while the wider STOXX retailers index <.SXRP> slid 4.3%.

☆ The UK's abrupt tax cuts are sowing market chaos — and putting policymakers in a no-win situation that threatens economic crisis
▼ + stars: | 2022-09-29 | by ( Ben Winck | ) www.businessinsider.com time to read: +7 min

The UK government's plan to slash taxes and stimulate economic growth has backfired spectacularly. The episode risks lifting inflation higher still and levying new economic pain on all Britons. What was introduced as an effort to boost the UK's economic growth is backfiring to an extraordinary degree. The blowback could range from a weaker British pound to a government default, even higher inflation, higher unemployment, a bigger wealth gap, and a crippling recession. According to Chancellor Kwasi Kwarteng, the aim was to lift the struggling UK economy and cut the risk of a near-term downturn.

"There will be impacts, there’s correlations ... some market volatility, and then how it weighs in the global growth picture," said Paul Malloy, head of municipals at Vanguard. The wild swings in the pound have ricocheted across currency markets, where volatility was already climbing. According to the widely watched Deutsche Bank Currency Volatility Index , volatility across currencies on Wednesday hit its highest level since the March 2020 COVID-19- induced market meltdown, jumping more than 20% from levels last week. Closely followed indicators of financial stress remain contained. U.S. stock market volatility as measured by the "fear index," the VIX (.VIX), has also climbed in recent days but remains below its 2022 highs.

☆ Breakingviews: BoE’s bond-buying U-turn is worth the risk
▼ + stars: | 2022-09-28 | by ( Neil Unmack | ) www.reuters.com time to read: +5 min

The fallout makes it even harder for Governor Andrew Bailey to convince markets he can tighten monetary policy. His decision on Wednesday to buy UK government debt and delay plans to sell down its 857 billion pound ($915 billion) bond portfolio carries big risks. Bailey’s goal is to cut holdings by 80 billion pounds over the next year. UBS analysts reckon issuance of gilts, after factoring in sales and redemptions from QT, will reach 355 billion pounds in the year ending March 2024. If Bailey can now tighten monetary policy without freaking out investors, his U-turn will have been worth the risk.

☆ Trump asked British Prime Minister Theresa May to 'imagine if some animals with tattoos raped your daughter' in conversation about abortion: book
▼ + stars: | 2022-09-28 | by ( Bryan Metzger | ) www.businessinsider.com time to read: +2 min

A new book from Maggie Haberman details Trump's first meeting with UK Prime Minister Theresa May. He reportedly brought up abortion, saying "imagine if some animals with tattoos raped your daughter." The graphic statement suggests a private sympathy with abortion rights, despite his record. "Imagine if some animals with tattoos raped your daughter and she got pregnant?" As president, Trump often sought to satisfy his evangelical base, most of whom are strongly opposed to abortion rights.

☆ Trump spoke about his years-long crusade to block a wind farm near his Scottish golf resort with UK PM Theresa May: book
▼ + stars: | 2022-09-28 | by ( Brent D. Griffiths | ) www.businessinsider.com time to read: +3 min

Trump asked UK Prime Minister Theresa May about one of his private golf courses, per a new book. Trump spoke about his years-long effort to block an offshore wind farm near one of his Scottish courses. Trump fought for years to block the development of an off-shore wind farm in the vicinity of his Trump International Golf Links, Scotland course near Aberdeen. In 2019, the Trump Organization was ordered to pay $290,000 to the Scottish government after losing a legal battle. Trump first met with May at the White House in January 2017 just days after he was sworn into office.

☆ Premarket stocks: Ronald Reagan's tax lesson for Britain
▼ + stars: | 2022-09-27 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

Citibank analysts called the decision a “huge, unfunded gamble for the UK economy.” Markets dropped precipitously on the news. But much like Truss, Reagan argued that massive tax cuts and deregulation would stimulate productivity and he championed a sweeping tax cut that was passed by Congress that year. According to US Treasury estimates, Reagan’s tax cuts reduced federal revenues by about 9% in the first couple of years. A lesson from history: “When tax cuts are really too big to be sustainable, they’re often followed by tax increases,” wrote David Wessel, director of The Hutchins Center on Fiscal and Monetary Policy. The US dollar appreciated during the Reagan tax cuts because it benefits from global reserve currency status.

☆ Russia's former president said nuclear threats are not a bluff, and that NATO won't step in if Russia nukes Ukraine
▼ + stars: | 2022-09-27 | by ( Mia Jankowicz | ) www.businessinsider.com time to read: +4 min

A top Russian official repeated Russia's nuclear threats, saying it "isn't a bluff." Dmitry Medvedev said NATO countries wouldn't step in if Russia fired a nuke on Ukraine. Russia will also "do anything" to prevent the nuclear weapons emerging in the country's "hostile neighbors" such as Ukraine, Medvedev said. Reminding the world about Russia's nuclear arsenal is nothing new among Putin and his allies. After Putin's latest statement, the White House warned Russia would face "catastrophic consequences" if it used tactical nuclear weapons.

☆ UK Prime Minister Liz Truss slams Putin, hails queen in debut UN speech
▼ + stars: | 2022-09-22 | by ( ) www.cnbc.com time to read: +5 min

British Prime Minister Liz Truss on Wednesday accused Russian President Vladimir Putin of making "saber-rattling threats" to cover his failed invasion of Ukraine, as she told the United Nations that its founding principles were fracturing because of aggression by authoritarian states. In her first international speech since becoming prime minister two weeks ago, Truss hailed the founding principles of the United Nations, while calling for new international alliances to circumvent the influence of authoritarian regimes. She also called for a toughening of the West's response to Russia's invasion. To Truss, a Conservative free marketeer, that means cutting individual and corporate taxes and slashing regulations for business. Despite the economic shockwaves, Truss said Britain's commitment to defending Ukraine "is total."

☆ Former senior Obama advisor guides lobbying and policy strategy of London cryptocurrency firm
▼ + stars: | 2022-09-19 | by ( Brian Schwartz | ) www.cnbc.com time to read: +4 min

The crypto industry has been ramping up lobbying around the world with potentially strict regulations on the horizon. The Biden administration released its framework on potential U.S. crypto regulations earlier this month, including ways that could help fight fraud. Kasselman described Messina as a critical guide to the company's lobbying and overall policy efforts. He noted that Messina is not a registered lobbyist, yet often advises their team on lobbying strategy. Kasselman credits Messina with the company hiring Ian Mair as Blockchain.com's head of U.S. policy and Giles Swan to run its European policy.

☆ Chief of staff to UK's new PM interviewed by the FBI over alleged Puerto Rico election bribe plot, says Sunday Times report
▼ + stars: | 2022-09-18 | by ( Bethany Dawson | ) www.businessinsider.com time to read: +3 min

Liz Truss's chief of staff has been interviewed by the FBI about a plot to influence an American election, The Sunday Times reports. Mark Fullbrook has been made a formal subject of a DoJ and FBI investigation into an alleged bribery plot in Puerto Rico. Mark Fullbrook has been made a formal subject of a DoJ and FBI investigation in April into an alleged conspiracy to influence a gubernatorial election in Puerto Rico. Number 10 Chief of Staff Mark Fullbrook leaving after a meeting with Liz Truss at Downing Street in London. Dominic Lipinski/PA/Getty ImagesThe FBI and DoJ investigation focuses on an alleged bribe plot involving Julio Herrera Velutini, an international banker and Conservative party donor, and Mark Rossini, a former FBI special agent.

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