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"It is really not the right time to experiment with fiscal policy," AXA chief economist Gilles Moec said about the UK's moves, assessing that Monday's U-turn may have appeased "the bond vigilantes for now". The term, bond vigilantes, refers to debt investors imposing fiscal discipline on profligate governments by forcing their borrowing costs higher. Ed Yardeni, who coined the bond vigilantes term in the early 1980s, penned a blog post saying "They're Baaaack!" Even U.S. President Joe Biden was speaking the bond vigilante's language at the weekend, noting he wasn't the only one that thought the UK plan was a "mistake". "This is probably the biggest example in practice of the bond vigilantes activity," said Antonio Cavarero, head of investments at Generali Insurance Asset Management.

☆ Sterling rebounds on UK fiscal policy U-turn; yen struggles
▼ + stars: | 2022-10-17 | by ( ) www.cnbc.com time to read: +3 min

In this photo illustration, British GDP £1 coins and bank notes are pictured in Bath, England. The news came hours after she sacked former finance minister Kwasi Kwarteng, with Jeremy Hunt replacing him. All eyes are now on how the UK government bond market will trade, after the Bank of England on Friday concluded its emergency gilt market support. The U.S. dollar index , which measures the greenback against a basket of currencies including the yen, firmed at 113.02. Elsewhere, the euro gained 0.26% to $0.9748, while the Australian and New Zealand dollars bounced mildly from recent losses.

☆ 'How's Brexit going?' British politics mocked at home and abroad
▼ + stars: | 2022-10-17 | by ( Gavin Jones | ) www.reuters.com time to read: +4 min

New British finance minister Jeremy Hunt will set out tax and spending measures on Monday, two weeks earlier than scheduled, as he races to stem a dramatic loss of investor confidence in Prime Minister Liz Truss's government. read more"How's Brexit going?" read moreEven Britain's staunchly conservative newspaper the Telegraph, which backed the Brexit referendum, acknowledged in a column on Sunday that its economic goals had failed. "The UK example of how quickly and aggressively markets can turn on you, is likely to keep Italian policy cautious. I am sure Rome is watching carefully what is happening in the UK," one senior euro zone official said.

☆ UK CFOs say credit is expensive, hit by "mini-budget," Deloitte survey says
▼ + stars: | 2022-10-16 | by ( William Schomberg | ) www.reuters.com time to read: +2 min

The quarterly Deloitte UK CFO Survey found 56% of chief financial officers at top companies thought credit was costly, the most since 2010. "A 12-year period of easy credit conditions is drawing to an end," Ian Stewart, chief economist at Deloitte, said. Register now for FREE unlimited access to Reuters.com RegisterCFOs who responded after Sept. 23's mini-budget were more likely to report high credit costs than those who responded before, Deloitte said. The Deloitte survey found CFOs on average saw a 78% chance that Britain would fall into recession in the next 12 months, and had tilted towards defensive strategies which prioritised cost reduction and cash control. The survey of 87 CFOs, including 23 from FTSE 100 companies and 30 from FTSE 250 firms, took place between Sept. 20 and Oct. 3.

☆ New UK finance minister faces market verdict after gutting Truss's plans
▼ + stars: | 2022-10-16 | by ( William Schomberg | ) www.reuters.com time to read: +3 min

LONDON, Oct 17 (Reuters) - Britain's new finance minister Jeremy Hunt faces an early test of his attempt to stem the crisis of confidence in Prime Minister Liz Truss on Monday when the bond market delivers its verdict on his weekend overhaul of her economic programme. No chancellor should seek to do that," Hunt told BBC television in an interview broadcast on Sunday. The Sunday Times reported Hunt would delay by a year a cut to income tax for workers which Truss had promised for April. "MEETING OF MINDS"Any bond market respite is likely to prove fragile before Hunt announces a new budget plan on Oct. 31. The budget will aim to narrow a hole in public finances that the Sunday Times reported is as big as 72 billion pounds ($80.4 billion), including the 45 billion pounds of tax cuts originally planned by Truss, only about 20 billion pounds of which have so far been reversed.

☆ Goldman Sachs sees deeper UK recession after tax U-turn, Bloomberg reports
▼ + stars: | 2022-10-16 | by ( ) www.reuters.com time to read: +1 min

Oct 16 (Reuters) - Goldman Sachs analysts have downgraded Britain's economic outlook after Prime Minister Liz Truss removed Kwasi Kwarteng as chancellor and reversed a freeze in corporation tax, Bloomberg News reported on Sunday. "Folding in weaker growth momentum, significantly tighter financial conditions, and the higher corporation tax from next April, we downgrade our UK growth outlook further and now expect a more significant recession," Bloomberg cited the investment bank's report as saying. On Friday, Truss said Britain will go ahead with corporation tax rise to 25% next year, making an U-turn on a pledge to freeze it at 19%. Goldman Sachs did not immediately respond to a Reuters request for comment. Register now for FREE unlimited access to Reuters.com RegisterReporting by Jahnavi Nidumolu in Bengaluru Editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.

☆ New UK finance minister vows to show markets he can fix budget
▼ + stars: | 2022-10-16 | by ( ) www.reuters.com time to read: +1 min

LONDON, Oct 16 (Reuters) - Britain's new finance minister Jeremy Hunt said he would show investors that he will repair the country's public finances after the original economic plans of Prime Minister Liz Truss triggered a bond market rout. No Chancellor should seek to do that," Hunt told BBC television in an interview broadcast on Sunday. But Hunt has said he will go further including increases in taxes as well as a tighter control on public spending. Asked whether he thought financial markets would have confidence in his plans, Hunt told the BBC: "Well, I think, you know, for people trading the markets, actions speak louder than words." Register now for FREE unlimited access to Reuters.com RegisterReporting by William James Writing by William Schomberg Editing by Louise HeavensOur Standards: The Thomson Reuters Trust Principles.

☆ Joe Biden says Liz Truss's plan to cut taxes for Britain's 'super-wealthy' was a 'mistake' as the UK prime minister battles to stay in power
▼ + stars: | 2022-10-16 | by ( Ryan Hogg | ) www.businessinsider.com time to read: +2 min

US President Joe Biden said plans by the UK to cut taxes for the highest earners were a "mistake." Liz Truss's government was forced into a U-turn on $50 billion of unfunded tax cuts this week. The US president told reporters the prime minister's climbdown on a multi-billion dollar tax cut plan was "predictable," in a rare comment on British politics. Truss, who leads the UK's centre-right Conservative Party, proposed sweeping tax cuts to the tune of £45 billion (around $50 billion) that would have been largely funded by borrowing. On Friday, Press Secretary Karine Jean-Pierre said the White House wouldn't comment on the situation in the UK.

"I can tell you that there was a very clear and immediate meeting of minds between us about the importance of fiscal sustainability and the importance of taking measures to do that," Bailey said. Truss criticised the BoE during her leadership campaign, saying she wanted to set a "clear direction of travel" for the central bank. "We will not hesitate to raise interest rates to meet the inflation target," Bailey said. "And, as things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August." "In these difficult times, we need to be very clear on this framework of intervention," Bailey said.

☆ U.K.'s new finance chief warns of 'difficult decisions ahead' amid political and market turmoil
▼ + stars: | 2022-10-15 | by ( Leila Sackur | ) www.nbcnews.com time to read: +5 min

LONDON — The U.K.'s new finance minister warned of “difficult decisions ahead” on Saturday, the morning after he had replaced his predecessor who was only 38 days into the job. Warning of “difficult decisions ahead” Hunt told British broadcaster Sky News: “Some taxes will not be cut as quickly as people would want, some taxes will go up.” (Sky News is owned by Comcast, the parent company of NBC News.) Kwarteng became the second shortest-serving chancellor of the exchequer, as the British finance minister is known. Britain's Prime Minister Liz Truss at a news conference on Friday. Truss is Britain’s third prime minister in six years.

☆ Growth push went 'too far, too fast', says UK finance minister Hunt
▼ + stars: | 2022-10-15 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 15 (Reuters) - Britain's new finance minister Jeremy Hunt said the government had gone "too far, too fast" in its drive for growth after Prime Minister Liz Truss was forced to fire his predecessor and make U-turns on tax-cutting plans amid market turmoil. Truss appointed Hunt on Friday to replace Kwasi Kwarteng, and said she was scrapping parts of their controversial economic package announced only three weeks earlier, which included billions of pounds of unfunded tax cuts. The drive on growing the economy is right - it means more people can get good jobs, new businesses can thrive and we can secure world class public services," Hunt said late on Saturday. Register now for FREE unlimited access to Reuters.com Register"But we went too far, too fast," he added in the statement. Register now for FREE unlimited access to Reuters.com RegisterReporting by Michael Holden Editing by Helen PopperOur Standards: The Thomson Reuters Trust Principles.

☆ BoE's Bailey says stronger rates response needed to fight inflation
▼ + stars: | 2022-10-15 | by ( ) www.reuters.com time to read: +2 min

"We will not hesitate to raise interest rates to meet the inflation target," Bailey said on Saturday at an event on the sidelines of the International Monetary Fund Meetings in Washington. "And, as things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August." "The MPC (Monetary Policy Committee) will respond to all this news at its next meeting in just under three weeks from now," he said. Prime Minister Liz Truss on Friday scrapped a freeze in corporate tax rates and said she would instead allow them to rise from April, as planned by Britain's previous government. "In these difficult times, we need to be very clear on this framework of intervention," Bailey said.

☆ New UK finance minister warns some taxes will rise in sign of new U-turn
▼ + stars: | 2022-10-15 | by ( ) www.cnbc.com time to read: +3 min

Jeremy Hunt arrives at his home in London after he was appointed Chancellor of the Exchequer following the resignation of Kwasi Kwarteng. Britain's new finance minister Jeremy Hunt said on Saturday that some taxes will have to go up, signaling another abrupt policy U-turn by Prime Minister Liz Truss who is battling to save her leadership just over a month into her term. Big, unfunded tax cuts were a central plank of Truss's original plans, but Hunt said tax increases were on the cards. "The thing that people want, the markets want, the country needs now, is stability," Hunt said. "Some taxes will not be cut as quickly as people want, and some taxes will go up.

LONDON, Oct 15 (Reuters) - Britain's new finance minister Jeremy Hunt said on Saturday that some taxes would go up and government spending would rise by less than previously planned as he warned of difficult decisions ahead to restore Britain's economic policy credibility. Truss said that corporation tax would increase, abandoning her plan to keep it at current levels. "We will have some very difficult decisions ahead," he told Sky News. But what I can do is show that we can pay for our tax and spending plans and that is going to need some very difficult decisions on both spending and tax." "Some taxes will not be cut as quickly as people want, and some taxes will go up.

☆ Biden knocks Truss economic plan, says not concerned about dollar strength
▼ + stars: | 2022-10-15 | by ( Jeff Mason | ) www.reuters.com time to read: +3 min

PORTLAND, Ore., Oct 15 (Reuters) - U.S. President Joe Biden on Saturday criticized British Prime Minister Liz Truss's original economic plan as a mistake and said he was not concerned about the strength of the soaring U.S. dollar. Biden, a Democrat, frequently criticizes conservative "trickle down" economic policies, associated in the United States with former President Ronald Reagan and Republicans. 1/2 British Prime Minister Liz Truss attends a news conference in London, Britain, October 14, 2022. It's worse off everywhere else than it is in the United States," he said. "So the problem is the lack of economic growth and sound policy in other countries, not so much ours."

The dollar also kept rising against Japan's beleaguered yen, hitting a fresh 32-year peak of 148.86. But as the session wore on, equity declines deepened with oil prices pushing energy stocks (.SPNY) down sharply and consumer stocks (.SPLRCD) falling sharply. "We're back to looking at inflation data very carefully. Even though Wall Street had rallied on Thursday despite soaring inflation data, investors appeared to return their focus to the data on Friday, according to Anthony Saglimbene, chief market strategist at Ameriprise Financial. The euro was down 0.55% at $0.9719 while the Japanese yen weakened 0.99% at 148.68 per dollar.

☆ Wall St drops as inflation worries persist
▼ + stars: | 2022-10-14 | by ( Chuck Mikolajczak | ) www.reuters.com time to read: +4 min

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 7, 2022. REUTERS/Brendan McDermidSummarySummary Companies JPM reports higher-than-expected Q3 profitS&P 500, Nasdaq poised for weekly declinesU.S. consumer sentiment edges up October; inflation ests. Register now for FREE unlimited access to Reuters.com RegisterThe data came a day after a reading on consumer prices showed inflation remains stubbornly high. The Dow was on track to close out the week with a gain while the S&P 500 and Nasdaq were poised for weekly declines. The S&P 500 posted 5 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 56 new highs and 171 new lows.

☆ Sterling drops as UK turmoil escalates; dollar hits new 32-year high vs yen
▼ + stars: | 2022-10-14 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +4 min

The dollar, on the other hand, continued its march higher against a beleaguered yen, hitting a fresh 32-year peak of 148.86. Japanese Finance Minister Shunichi Suzuki on Thursday reiterated the government's readiness to take steps against excessive currency volatility. Register now for FREE unlimited access to Reuters.com RegisterJapan last month intervened to buy yen for the first time since 1998. The pound, meanwhile, fell for a second straight day against the dollar, last traded at $1.1167, down 1.4% . U.S. retail sales were unexpectedly unchanged in September as stubbornly high inflation and rapidly rising interest rates crimp demand for goods.

☆ British PM Liz Truss axes finance minister, tax cuts that sent pound crashing
▼ + stars: | 2022-10-14 | 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

LONDON — Embattled British Prime Minister Liz Truss fired her finance minister and abandoned a flagship policy Friday, in a bid to save her job after her economic plan stoked weeks of market panic. Earlier, Truss removed Finance Minister Kwasi Kwarteng just 38 days after the pair took power. Kwarteng becomes the second shortest-serving chancellor of the exchequer, as the British finance minister is known. Truss' personal office confirmed the next finance minister will be Jeremy Hunt, a former health secretary and minister under successive Conservative governments. Crucially, the bank’s bond-buying program is set to end Friday, meaning the government must convince markets its economic plan is sound to avoid further chaos.

☆ U.K. Prime Minister Liz Truss Fires Treasury Chief, U-Turns on Taxes
▼ + stars: | 2022-10-14 | by ( Max Colchester | ) www.wsj.com time to read: 1 min

LONDON—U.K. Prime Minister Liz Truss fired Treasury chief Kwasi Kwarteng and reversed crucial parts of her government’s tax plan, a major setback for the new leader after her plan to jolt the economy into growth unraveled in spectacular fashion following a backlash from financial markets and her party. Mr. Kwarteng, who just three weeks ago presented the U.K.’s largest tax cuts since the 1970s, was asked to quit by Ms. Truss as markets balked at the scale of the borrowing required to fund the package and her lawmakers protested at the prospect of deep public-spending cuts. Mr. Kwarteng became the second-shortest-serving chancellor of the exchequer in recent British history. He was replaced by Jeremy Hunt , a party centrist and former foreign secretary.

☆ U.K. Treasury Chief Kwasi Kwarteng Fired Amid Market Pressure
▼ + stars: | 2022-10-14 | by ( Max Colchester | ) www.wsj.com time to read: 1 min

LONDON—U.K. Prime Minister Liz Truss fired Treasury chief Kwasi Kwarteng , in an attempt to salvage her tenure following pressure from her Conservative Party and international markets. Mr. Kwarteng, who just three weeks ago presented the largest tax cuts since the 1970s, was replaced after markets balked at the scale of the borrowing required to fund the growth package. He became the second-shortest-serving chancellor in recent British history.

Other media said Truss would allow corporation tax to rise in April, reversing a decision to freeze it that was part of Kwarteng's "mini-budget" announced last month. Yields for index-linked gilts also fell sharply. Bets on a peak for rates to hit 5.5% next year were no longer fully priced in. They have gathered pace as investors offered more bonds to the central bank with the scheme nearing its end. LDI funds had been hit hard by the record slump in long-dated gilt prices after Kwarteng's mini-budget.

☆ British government performs major U-turn on tax cuts. But markets are far from convinced
▼ + stars: | 2022-10-14 | by ( Hannah Ward-Glenton | ) www.cnbc.com time to read: +2 min

British Prime Minister Liz Truss attends a news conference in London, Britain, October 14, 2022. Daniel Leal | ReutersLONDON — A major reshuffle and the scrapping of a key tax-cutting pledge by U.K. Prime Minister Liz Truss on Friday wasn't enough to placate markets with the pound and government bonds continuing to sell off. It seems that Truss's speech did little to reassure markets, or to convince analysts that Britain's financial storm has passed. Rather than settling the waters, Truss's U-turn on tax decisions will leave investors cautious of future political upheaval, according to Mike Owens, a U.K. sales trader at Saxo. "The costs of the mini-budget horror show have already been high and it's not clear that the expected corporation tax U-turn will sustainably calm markets," he said.

The battered pound and government bonds rallied on Thursday as Prime Minister Liz Truss's government began re-examining a package for unfunded tax cuts that has sent borrowing costs surging and forced the Bank of England to intervene. Asked if the government was preparing to change course, he told Sky News: "I saw the prime minister yesterday. The prime minister and the chancellor are absolutely determined to deliver on the growth plan. The sense of chaos at the heart of government has fuelled speculation as to whether Truss and Kwarteng can survive. Truss was elected by the members of the party, and not the broader electorate, as the fourth prime minister in six politically turbulent years in Britain.

☆ UK's Kwarteng should change course within 48 hours - senior lawmaker
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +1 min

LONDON, Oct 14 (Reuters) - British finance minister Kwasi Kwarteng should change course on his budget policy within 48 hours in order to regain the confidence of financial markets and the public, a senior Conservative lawmaker, Mel Stride, said on Friday. And I think that means doing something right now," Stride told the BBC. "He has got to really get out there emphatically and nail it. And I think he has to start in the next 48 hours," he added. Register now for FREE unlimited access to Reuters.com RegisterReporting by David Milliken; editing by Sarah YoungOur Standards: The Thomson Reuters Trust Principles.

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