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☆ 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.

☆ 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.

☆ 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."

☆ 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.

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.

☆ 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.

☆ 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 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.

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.

☆ UK PM Liz Truss's news conference after finance minister sacked
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +2 min

read moreBelow are some of the key quotes from Truss's news conference:ON HER MISSION"I want to deliver a low tax, high wage, high growth economy. Register now for FREE unlimited access to Reuters.com Register"We recognise because of current market issues. ON CORPORATION TAX"We need to act now to reassure the markets of our fiscal discipline. ON NEW FINANCE MINISTER JEREMY HUNT"He's one of the most experienced and widely respected government ministers and parliamentarians and he shares my convictions and ambitions for our country. Register now for FREE unlimited access to Reuters.com RegisterReporting by Kylie MacLellan; editing by William JamesOur Standards: The Thomson Reuters Trust Principles.

☆ UK's Kwarteng cuts short Washington trip, returns to London, sources say
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +1 min

WASHINGTON, Oct 13 (Reuters) - British finance minister Kwasi Kwarteng is cutting short his trip to Washington for this week's global finance minister meetings and returning to London to continue work on his government's medium-term fiscal plan, sources familiar with the matter said on Thursday. Kwarteng confirmed to reporters that he was flying back to London early without providing further details. Kwarteng is due to announce his medium-term budget plans on Oct. 31, alongside independent fiscal forecasts. Kwarteng had a "successful" two days at the International Monetary Fund and World Bank's annual meetings here, the sources said. Register now for FREE unlimited access to Reuters.com RegisterReporting By David Lawder; Editing by Sandra MalerOur Standards: The Thomson Reuters Trust Principles.

Yet he ultimately carried the can for an unwelcome fiscal plan that roiled bond markets, spooked investors and sparked a major backlash from governing Conservative Party lawmakers. Cutting his visit short, he flew back to London on Friday to "continue work at pace" for a medium-term fiscal plan due at the end of the month. Nor were further moves to re-embrace Treasury orthodoxy through the choice of Scholar's replacement and a decision to bring forward a medium-term fiscal plan and forecasts. In a reply to Kwarteng, Truss said she was deeply sorry to lose a long-standing friend from government. But a finance minister being ditched so quickly for his policies - especially when they were so closely aligned with the prime minister - is unprecedented in modern times.

☆ Jeremy Hunt is Britain's new finance minister - Times
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: 1 min

LONDON, Oct 14 (Reuters) - Former British foreign minister Jeremy Hunt is the country's new finance minister, the Times reported on Friday, after Kwasi Kwarteng was sacked from the role by Prime Minister Liz Truss. "Jeremy Hunt is the new chancellor," Times Political Editor Steven Swinford said on Twitter. "He'll be announced shortly at Liz Truss's press conference." Register now for FREE unlimited access to Reuters.com RegisterReporting by William James, writing by Muvija MOur Standards: The Thomson Reuters Trust Principles.

☆ 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.

☆ Can Liz Truss outlast a lettuce, UK tabloid asks in Twitter post
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +1 min

LONDON, Oct 14 (Reuters) - A British newspaper on Friday pitted Liz Truss in a race against a lettuce, asking readers if they thought the under-fire prime minister would lose her job before the vegetable decayed. loadingThe tabloid Daily Star set up a live feed of an unrefrigerated iceberg next to a photo of Truss. Register now for FREE unlimited access to Reuters.com RegisterThe stunt echoed a comment at the other end of Britain's journalistic spectrum. Truss's political role model, 1980s prime minister Margaret Thatcher, was widely known as the Iron Lady. Register now for FREE unlimited access to Reuters.com RegisterReporting by John Stonestreet; Editing by Andrew HeavensOur Standards: The Thomson Reuters Trust Principles.

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.

☆ UK's Truss U-turns on tax, ditches finance minister
▼ + stars: | 2022-10-14 | by ( Reuters Editorial | ) www.reuters.com time to read: 1 min

PoliticsUK's Truss U-turns on tax, ditches finance ministerPostedBritish Prime Minister Liz Truss fired her finance minister Kwasi Kwarteng on Friday and scrapped parts of their economic package in a desperate bid to stay in power and survive the market and political turmoil gripping the country. Lauren Anthony reports.

☆ Morning Bid: Mystery Dance
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike Dolan. Sudden and sometimes unexplained stock rallies are often hallmarks of prolonged bear markets. U.S. stock futures have retraced a bit - but an hour is a long time in markets these days. read moreElsewhere, China's stocks surged ahead of the Communist Party Congress and amid an expected rise in domestic inflation. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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