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☆ Fracking: What's all the fuss about it in the UK?
▼ + stars: | 2022-10-20 | by ( Reuters Christian Edwards | Christian Edwards | ) edition.cnn.com time to read: +5 min

Fracking, or hydraulic fracturing, involves drilling into the Earth and injecting water and chemicals at high pressure to break rocks and release the gas trapped inside. Since only few test wells have been drilled, there are no estimates of proven reserves to confidently predict how much shale gas would be technically and economically viable to extract by fracking. Cuadrilla, 96% owned by Australia’s AJ Lucas, was the only one of these firms to receive consent to begin fracking. Former British Chancellor Kwasi Kwarteng said in March when he was Business and Energy secretary gas fracking would not lead to lower British gas prices. “With the best will in the world, private companies are not going to sell the shale gas they produce to UK consumers below the market price,” he tweeted.

☆ Our lettuce outlasted Liz Truss, British paper declares, as PM quits
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 20 (Reuters) - To the strains of Britain's national anthem, a national newspaper on Thursday declared a lettuce the victor in a race to see if it could outlast Liz Truss, after the under-fire prime minister resigned. The tabloid Daily Star set up a live feed on Friday showing the unrefrigerated iceberg next to a photo of Truss, asking readers: "Which wet lettuce will last longer?" Moments later, as viewer numbers hit 21,000, "God Save the King" rang out as a hand reached across the table and set Truss's photo on its back and the caption "The lettuce has outlasted Liz Truss" appeared. In a column published last week titled "The Iceberg Lady", the Economist magazine described Truss as having "the shelf-life of a lettuce". Truss's political role model, 1980s prime minister Margaret Thatcher, was widely known as the Iron Lady.

☆ Truss resigns: What you need to know
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: +3 min

She said she will remain as Prime Minister until a successor had been chosen within a week. Following are latest events, comments and context:Register now for FREE unlimited access to Reuters.com RegisterPOLITICS* The text of Truss' resignation speech at Downing Street. * Truss said the Conservative party she heads would hold a leadership election to be completed within a week. * Truss's resignation came after she lost her interior minister, Suella Braverman, less than a week after she fired her finance minister. Reuters GraphicsRegister now for FREE unlimited access to Reuters.com RegisterCompiled by Frank Jack DanielOur Standards: The Thomson Reuters Trust Principles.

☆ UK PM Liz Truss was forced from office after losing fights with the markets and her own fractured party
▼ + stars: | 2022-10-20 | by ( Bethany Dawson | ) www.businessinsider.com time to read: +4 min

UK Prime Minister Liz Truss resigned Thursday after a catastrophic 44 days in office. Her plan to radically reshape the UK economy was brutally rejected by financial markets. The plan, radically out of step with the background of soaring inflation and interest-rate hikes, spooked the financial markets. Initial attempts by Truss and her finance minister Kwasi Kwarteng to ride out the chaos did not last long. As Thursday dawned, some of her party's MPs publicly called for her to go.

☆ Breakingviews: Britain’s next leader will be on a short leash
▼ + stars: | 2022-10-20 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +4 min

The British leader announced her resignation on Thursday after just 44 days in charge, making her the country’s shortest-serving prime minister ever. Truss will stay in office until the Conservative Party chooses a replacement by the end of next week. However, her tenure effectively ended last Friday, when she was forced to replace her finance minister and reverse massive tax cuts which had triggered a self-imposed financial crisis. Truss said she would step down as leader and remain prime minister until a successor is chosen “in the next week”. “I recognise though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative party,” Truss said.

☆ Embattled British PM Truss loses 2nd minister in a week amid political and economic turmoil
▼ + stars: | 2022-10-19 | by ( Associated Press | ) www.nbcnews.com time to read: +5 min

British Prime Minister Liz Truss described herself as “a fighter and not a quitter” Wednesday as she faced down a hostile opposition and fury from her own Conservative Party over her botched economic plan. And within hours of Truss’ appearance in Parliament for a regular session titled Prime Minister’s Questions, she lost a senior member of her government. Truss faced another test in Parliament later Wednesday when lawmakers vote on a Labour Party motion seeking to ban fracking for shale gas — a policy that Truss recently approved. Conservative Party whips said the vote would be treated as “a confidence motion in the government,” meaning the government would fall if the motion passed, triggering an election. Some Conservative legislators believe Truss could be forced to resign if the party agrees on a successor.

☆ The pound slides after soaring food prices drive UK inflation back to a 40-year high of 10.1%
▼ + stars: | 2022-10-19 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

The British pound fell below $1.13 Wednesday after UK inflation hit 10.1% in September. Soaring food and housing costs helped drive inflation back to the 40-year high hit in July. The biggest rise in food prices since 1980 helped push the inflation rate back into double digits, the ONS said. "The uptick in food prices will be of particular concern," he added. Signs of prices rising beyond core areas is a warning sign for the likelihood of an economic slowdown.

☆ Senior adviser to UK PM Truss suspended - BBC
▼ + stars: | 2022-10-19 | by ( ) www.reuters.com time to read: +1 min

LONDON, Oct 19 (Reuters) - One of British Prime Minister Liz Truss's most senior advisers has been suspended and is to face a formal investigation by the government's Propriety and Ethics team, the BBC's political editor reported on Wednesday. A spokesperson for Truss declined to comment on what he called individual staffing matters, but said: "The prime minister has made very clear to her team that some of the ... briefings that we have seen are completely unacceptable about parliamentary colleagues and they must stop." Over the weekend, the Sunday Times quoted a source in the prime minister's Number 10 Downing Street office as using an expletive to describe Sajid Javid, a former minister who the newspaper said had been approached to become finance minister after the sacking of Kwasi Kwarteng. Register now for FREE unlimited access to Reuters.com RegisterReporting by Farouq Suleiman, editing by Elizabeth Piper and William JamesOur Standards: The Thomson Reuters Trust Principles.

☆ Bank of England and City square off over new government powers
▼ + stars: | 2022-10-19 | by ( Huw Jones | ) www.reuters.com time to read: +3 min

A general view of the Bank of England (BoE) building in London, Britain, August 4, 2022. While Britain remains Europe's biggest financial sector after its exit from the European Union, banks are keen for regulators to help boost the City's global competitiveness. Britain's finance ministry will use a financial services and markets bill now before parliament to give itself powers to intervene in financial rulemaking, when in the public interest. David Postings, chief executive of UK Finance, a banking lobby, said powers to override regulators should be tightly drawn and used sparingly. A source at the ministry confirmed this was still the plan under new finance minister Jeremy Hunt.

She will be succeeded by former Transport Secretary Grant Shapps, Downing Street confirmed roughly an hour after her announcement. Notably, Shapps did not back Prime Minister Liz Truss in this summer's leadership race and has criticized some of her policies. In a resignation letter posted to Twitter, Braverman said, "It is with the greatest regret that I am choosing to tender my resignation." In a letter to Braverman posted on the Downing Street website, Truss wrote: "I accept your resignation and respect the decision you have made. Braverman ran against Truss for the Conservative leadership race this summer but was knocked out in an early stage.

☆ UK inflation moves back up to 40-year high as Brits battle cost-of-living crisis
▼ + stars: | 2022-10-19 | by ( Hannah Ward-Glenton | ) www.cnbc.com time to read: +2 min

The Office for National Statistics announced inflation figures Wednesday as the U.K. undergoes a historic cost-of-living crisis and political turmoil. The figure for September matches the 40-year high British inflation reached in July. The rate rose in the year to September 2022 as the country's cost-of-living crisis continues to hammer households and businesses ahead of a tough winter. Inflation unexpectedly dipped to 9.9% in August, down from 10.1% in July, on the back of a fuel price decline. September's inflation rate highlights the severity of the U.K.'s inflation crisis, and comes as the country weathers a period of economic volatility.

☆ Will Liz Truss outlast a lettuce? British PM faces jokes after ditching tax cut plans
▼ + stars: | 2022-10-18 | by ( Https | Media-Cldnry.S-Nbcnews.Com Image Upload Newscms Patrick-Smith-Circle-Byline-Template.Jpg | Patrick Smith | ) www.nbcnews.com time to read: +5 min

President Joe Biden even joined the criticism with a rare comment on an ally’s economic policies in which he called the tax cut plan a “mistake.”Truss admitted fault Monday night. “I do want to accept responsibility and say sorry for the mistakes that have been made,” she told BBC News. “Anyone could have seen that this wasn’t going to fly — how could they have not seen that coming?” Ford said. As critics had predicted, markets tanked and the pound fell to its lowest level against the dollar in 30 years. “It wasn’t just a total disaster with the markets, it was a total disaster electorally,” Ford said of Truss’ economic plan.

☆ Sterling dips as market trims BoE rate hike bets, yen scrabbles off 32-yr low
▼ + stars: | 2022-10-18 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

The battered Japanese yen traded near a 32-year trough to the dollar at 149 yen, putting the major psychological barrier of 150 in focus. ING expects now a 75 basis-point rate hike in November rather a full-point move expected before the fiscal policy U-turn, Smith added. The euro was volatile weakened against the dollar following German investor sentiment data, which albeit less pessimistic than expected, still painted a bleak picture of Europe's biggest economy. The dollar index which measures its performance against six major currencies, including sterling, the euro and the yen - was last down 0.1% at 112.00. Britain's policy U-turn saw the risk-sensitive New Zealand dollar surge more than 1%, already lifted by hotter-than-expected consumer inflation data, boosting bets for further rate hikes.

With Jeremy Hunt taking up the role on Friday, Britain has had four finance ministers in just four months. Prior to the 2016 Brexit vote, Britain had four finance ministers in 23 years, underlining a sense of stability that is now gone. The response was brutal: the pound slumped, government borrowing costs surged, lenders pulled mortgage deals and the Bank of England had to intervene to stop some pension funds from going under. While Truss had touted low corporation tax as a way to attract business investment, the executives said they wanted stability. British business investment, which flatlined after the 2016 Brexit vote and then fell sharply during the pandemic, was 6% lower in the second quarter of this year than its level of six years ago, in stark contrast to international peers.

☆ Sterling pauses after UK fiscal U-turn rally, yen scrabbles off 32-year low
▼ + stars: | 2022-10-18 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

British pound banknote is displayed on U.S. Dollar banknotes in this illustration taken, February 14, 2022. Register now for FREE unlimited access to Reuters.com RegisterAfter Monday's almost 2% rally, sterling was down 0.1% against the U.S. dollar to $1.1340 at 0815 GMT. Improved risk sentiment has bolstered the euro to $0.9872, its highest since Oct. 6, with a fall in energy prices also supporting the single currency. "Euro/dollar went under parity in late August largely driven by the negative terms of trade shock of higher energy prices. The UK news saw the risk-sensitive New Zealand dollar , already lifted by hotter-than-expected consumer inflation data, extend its surge, up 1% to $0.5691.

☆ Analysis: The UK just stepped back from the brink. But there's more trouble ahead
▼ + stars: | 2022-10-18 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

The sudden reversal of almost all tax cuts announced just three weeks ago could put financial markets on more stable footing. Yields on 30-year UK government bonds, which move opposite prices, have dipped to 4.34% after topping 5% last week. But concerns about the economy are resurfacing in lieu of angst about the country’s financial markets — though on that front, too, uncertainty remains. The specter of additional volatility in financial markets still lingers. And restoring investor confidence in UK assets will be an effort that takes time — especially as questions about Truss’ political future swirl.

☆ Premarket stocks: The strong dollar has an unexpected victim
▼ + stars: | 2022-10-18 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +6 min

New York CNN Business —The strong dollar has been a headwind for blue chip US companies in the Dow and S&P 500 this year. And the Russell 2000, another index of mostly smaller companies, is down 25%, too. Also, the dollar is so strong — the US Dollar Index, which tracks the greenback against the euro, pound, yen and several other currencies has soared 18% this year — it’s making foreign imports cheaper. But real estate stocks have been slammed by worries about a housing and office real estate slowdown. And multinational companies and foreign stocks will fare more poorly than smaller companies with little to no international exposure.

People exit Bank underground station in the City of London financial district during rush hour in London, Britain, October 3, 2022. Investors on Tuesday were pricing in a 66% chance the BoE will raise its benchmark Bank Rate by a full percentage point on Nov. 3, its next scheduled monetary policy announcement, down from a near-certainty before the sweeping fiscal U-turns. Register now for FREE unlimited access to Reuters.com RegisterInvestors have also pared back their bets on the peak for Bank Rate which they now see at 5.25%, up from a current 2.25% but down from almost 6% predicted earlier this month. But the outlook for the British economy has changed so markedly that the picture looks different for the BoE. "I expect the Bank of England will be responding only to the inflation picture," Punhani said.

☆ Liz Truss' 'trickle-down economics' is dead. Now the UK faces an uncertain future
▼ + stars: | 2022-10-18 | by ( Sam Meredith | ) www.cnbc.com time to read: +4 min

Britain's Prime Minister Liz Truss holds a press conference in the Downing Street Briefing Room in central London on Oct. 14, 2022. Daniel Leal | Afp | Getty ImagesLONDON — Just six weeks into U.K. Prime Minister Liz Truss' tenure and the political future of yet another Conservative leader looks to be in jeopardy. The approach has been sharply criticized by U.K. political opponents — and even U.S. President Joe Biden — at a time when Britain faces a deepening cost-of-living crisis. However, analysts at political risk consultancy Eurasia Group assign only a 10% possibility that Truss is able to hold on as prime minister. "The consensus at Westminster is now that that the Prime Minister is so weak that she can do nothing without the assent of her Chancellor.

☆ BoE set to further delay quantitative tightening until gilt markets calm -FT
▼ + stars: | 2022-10-18 | by ( ) www.reuters.com time to read: +1 min

Oct 18 (Reuters) - The Bank of England is likely to delay the sale of billions of pounds of government bonds to encourage greater stability in gilt markets following Britain's failed "mini" budget, the Financial Times reported on Tuesday. The decision by the central bank's top officials comes after they judged the gilts market to be "very distressed" in recent weeks, the newspaper said. Register now for FREE unlimited access to Reuters.com RegisterBritish financial markets have been under strain since former finance minister Kwasi Kwarteng announced the string of tax cuts with no details of how they would be paid for on Sept. 23. The BoE last intervened in the gilt market in March 2020 to stem price volatility caused by the pandemic, expanding its then-dormant quantitative easing programme by hundreds of billions of pounds. ($1 = 0.8776 pounds)Register now for FREE unlimited access to Reuters.com RegisterReporting by Akriti Sharma in Bengaluru; Editing by Clarence Fernandez and Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ British U-Turn Shows Central Banks Still Rule (and That’s Not Always Good)
▼ + stars: | 2022-10-17 | by ( Jon Sindreu | ) www.wsj.com time to read: 1 min

In its game of chicken with the U.K. government, the Bank of England has emerged victorious. Investors are relieved, but in truth nobody has much to celebrate. On Monday, U.K. Treasury chief Jeremy Hunt rolled back £32 billion, equivalent to about $36 billion, out of the £45 billion in tax cuts promised by his predecessor Kwasi Kwarteng . British sovereign bonds rallied, particularly those with shorter maturities.

☆ Analysis: Despite tax U-turn, UK's Hunt still faces tough budget choices
▼ + stars: | 2022-10-17 | by ( William Schomberg | ) www.reuters.com time to read: +5 min

LONDON, Oct 17 (Reuters) - The screeching about-turn on tax cuts by finance minister Jeremy Hunt on Monday will not spare Britain from painful spending cuts and new tax hikes to fix the country's public finances. Paul Johnson, director of the Institute for Fiscal Studies, a think-tank, said Monday's tax cuts U-turn was relatively simple compared with the balance Hunt must strike between more tax increases and spending cuts over the next two weeks. Hunt said the tax U-turns announced so far would raise about 32 billion pounds a year in extra revenues. That was 40 billion pounds above the level needed to cut debt as a share of the economy which currently is about 97%. "With tens of billions of spending cuts still to come, and a new energy support package needing to be devised, many of Jeremy Hunt's tough choices still lie ahead," Torsten Bell, chief executive of the Resolution Foundation, said.

The former foreign and health minister was appointed on Friday after Truss sacked Kwasi Kwarteng, her close ally. Under the new policy, most of Truss's 45 billion pounds of unfunded tax cuts will go and a two-year energy support scheme for households and businesses - expected to cost well over 100 billion pounds - will now be curtailed in April. Hunt said halting the planned tax cuts would raise 32 billion pounds ($36 billion) every year. REUTERS/Henry Nicholls/File PhotoBut the response from bond investors who would fund the tax cuts was violently negative and borrowing costs surged. After scrapping one of the tax cuts, Truss fired Kwarteng on Friday, saying she accepted her plans had gone "further and faster" than investors were expecting.

☆ Dollar dips as UK budget U-turn improves market sentiment
▼ + stars: | 2022-10-17 | by ( Karen Brettell | ) www.reuters.com time to read: +2 min

British Pound Sterling and U.S. Dollar notes are seen in this June 22, 2017 illustration photo. Register now for FREE unlimited access to Reuters.com RegisterBritish gilts rallied sharply after the news, helping to also send U.S. Treasury yields lower. Hunt replaced Kwasi Kwarteng, whose package of unfunded tax cuts on Sept. 23 unleashed a bond market sell-off. "For now, the market seems happy to give the new chancellor time and space to put the government's house back in order," said Chris Beauchamp, chief market analyst at IG. Traders are also on watch for any intervention from the Bank of Japan after the yen fell to a 32-year low.

☆ U.K. Treasury chief scraps nearly all government tax cut plans
▼ + stars: | 2022-10-17 | by ( Associated Press | ) www.nbcnews.com time to read: +4 min

U.K. Treasury chief Jeremy Hunt on Monday reversed most of an economic package announced by the government just weeks ago, including a planned cut to income tax. In a bid to soothe turbulent financial markets, Hunt said he was scrapping “almost all” the tax cuts announced last month and signaled public spending cuts are on the way. The unfunded tax cuts fueled investor concern about unsustainable levels of government borrowing, which pushed up government borrowing costs, raised home mortgage costs and sent the pound plummeting to an all-time low against the dollar. Hunt was under pressure to act before financial markets opened on Monday because the central bank’s support for the bond market ended Friday. The U.K. currency is now trading for roughly the same price it was on Sept. 22, the day before Kwarteng announced the tax cuts.

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