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☆ UK finance minister Kwarteng confirms he has been sacked
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +1 min

Chancellor of the Exchequer Kwasi Kwarteng exits a car on Downing Street in London, Britain, October 14, 2022. REUTERS/Henry NichollsLONDON, Oct 14 (Reuters) - British finance minister Kwasi Kwarteng confirmed on Friday he had been sacked by Prime Minister Liz Truss, becoming the third chancellor to leave the government this year. I have accepted," Kwarteng said in a letter to Truss, which he published on Twitter. read more"It is important now as we move forward to emphasise your government's commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches," Kwarteng said.

☆ British finance minister races back to London as pressure builds for another policy U-turn
▼ + stars: | 2022-10-14 | by ( Sam Meredith | ) www.cnbc.com time to read: +2 min

LONDON — U.K. Finance Minister Kwasi Kwarteng cut short his visit to the International Monetary Fund this week, dashing back to London amid reports Prime Minister Liz Truss is considering a U-turn on parts of her government's market-rocking tax cuts. Reuters reported, citing unnamed sources, that the finance minister planned to meet with colleagues to work on the government's medium-term budget plan. Kwarteng's abrupt departure from a series of international finance meetings in Washington, D.C. comes amid a growing political backlash against the Conservative government's proposed tax cuts. The British pound rose by 2% to trade at $1.1319 on Thursday, shrugging off stronger-than-expected U.S. inflation data. Meanwhile, long-dated U.K. government bonds — known as gilts — rallied on Friday morning, with 30-year yields trading at 4.38%.

☆ Jeremy Hunt could become next UK 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 will succeed Kwasi Kwarteng as the new finance minister, a reporter for the Times said on Friday, following media reports that Kwarteng has been sacked. "Multiple sources are now telling me that Jeremy Hunt will be the new chancellor, although I’ve not had official confirmation yet," Steven Swinford, Political Editor at the Times newspaper, said on Twitter. Register now for FREE unlimited access to Reuters.com RegisterReporting by William James, writing by Muvija M; Editing by Sachin RavikumarOur Standards: The Thomson Reuters Trust Principles.

☆ UK Finance Minister Kwasi Kwarteng fired after market chaos and tax-cutting plans
▼ + stars: | 2022-10-14 | by ( Elliot Smith | ) www.cnbc.com time to read: +1 min

Kwasi Kwarteng, UK chancellor of the exchequer, speaks at a fringe event during the Conservative Party's annual autumn conference in Birmingham, UK, on Tuesday, Oct. 4, 2022. LONDON — British Finance Minister Kwasi Kwarteng was fired on Friday after less than six weeks in the role, amid mounting political pressure and market chaos. "The economic environment has changed rapidly since we set out the Growth Plan on 23 September. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches." Jeremy Hunt — a former Health Secretary and Foreign Secretary — was announced as Kwarteng's successor.

Two days later, a chastened Truss addressed her first news conference as prime minister to admit she had gone "further and faster" than markets expected and sacked her friend and finance minister Kwasi Kwarteng to try to appease her lawmakers. With her credibility in tatters, she is now fighting for her political survival. "But it is clear that parts of our mini budget went further and faster than markets were expecting. Truss has also lost an important ally and, according to one person close to her, an important source of support in Kwarteng. But a veteran Conservative insider said it was simply a case of survival.

☆ UK finance minister Hunt to set out govt's fiscal plan on Oct. 31
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: 1 min

New Chancellor of the Exchequer Jeremy Hunt leaves 10 Downing Street in London, Britain, October 14, 2022. REUTERS/Henry NichollsLONDON, Oct 14 (Reuters) - New British finance minister Jeremy Hunt will set out the government's medium-term fiscal plan on Oct. 31, the Treasury said in a statement on Friday, sticking to the date his predecessor had announced. The Treasury said Hunt, who was appointed on Friday after his predecessor Kwasi Kwarteng was fired by Prime Minister Liz Truss, would set out how the government would get debt falling as a percentage of GDP over the medium term. Register now for FREE unlimited access to Reuters.com RegisterReporting by Kylie MacLellan; Editing by Alistair SmoutOur Standards: The Thomson Reuters Trust Principles.

☆ UK finance minister Kwarteng has been sacked - BBC
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: 1 min

LONDON, Oct 14 (Reuters) - Britain's finance minister Kwasi Kwarteng has been sacked after less than six weeks in the job, the BBC reported on Friday, as the government's massive tax cuts sparked financial market turmoil. Kwarteng is no longer chancellor of the exchequer, the BBC said. The Times newspaper reported earlier that Kwarteng was expected to be sacked. His sacking makes Kwarteng Britain's shortest serving chancellor since 1970, and his successor would be the UK's fourth finance minister in as many months as the nation grapples with a cost-of-living crisis. Register now for FREE unlimited access to Reuters.com RegisterReporting by William James, Muvija M and Alistair Smout, writing by Sachin RavikumarOur Standards: The Thomson Reuters Trust Principles.

☆ UK bond market chaos sends investors fleeing into into money-market funds-Fitch
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +3 min

Money market funds typically invest in high quality assets over a shorter-term horizon than other asset managers and, as such, are perceived to carry lower risk. Register now for FREE unlimited access to Reuters.com RegisterFitch warned that if the volatility in British gilts persisted or intensified, "liquidity pressure" could spread beyond pension funds. The agency noted that such a development could lead to sudden large redemptions of cash from money market funds (MMFs). Ten-year gilt yields were down 17 basis points on the day at 4.022% and 30-year yields - hardest hit by the sell-off since the mini-budget - were 14 bps lower at 4.41%. Still, 30-year gilt yields are up 60 bps this month, versus with a rise of 12 bps in U.S. and German peers , .

☆ UK PM Liz Truss's letter to outgoing finance minister Kwasi Kwarteng
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 14 (Reuters) - British Prime Minister Liz Truss said on Friday that Kwasi Kwarteng had put the national interest first by resigning as finance minister after less than six weeks in the job. Below is the full text of her letter to Kwarteng:"Thank you for your letter. Register now for FREE unlimited access to Reuters.com Register"We share the same vision for our country and the same firm conviction to go for growth. You have put the national interest first. Register now for FREE unlimited access to Reuters.com RegisterReporting by Kylie MacLellan; editing by David MillikenOur Standards: The Thomson Reuters Trust Principles.

☆ UK's Kwarteng, asked about new U-turn, says no change in his position
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: +1 min

"My total focus... is on delivering on the mini-budget and making sure that we get growth back into our economy." Sky News and other media said earlier on Thursday that Prime Minister Liz Truss was considering a possible U-turn on the plan not to raise corporation tax. Truss's office said there was no change in the plan. The BBC asked Kwarteng if he would be finance minister and Truss would still be prime minister this time next month. Register now for FREE unlimited access to Reuters.com RegisterWriting by William Schomberg Editing by Kate HoltonOur Standards: The Thomson Reuters Trust Principles.

☆ British pound jumps on reports UK government may reverse parts of its tax-cutting proposals
▼ + stars: | 2022-10-13 | by ( Sam Meredith | ) www.cnbc.com time to read: +1 min

In this photo illustration, the British pound is seen displayed. LONDON — Sterling jumped against the U.S. dollar on Thursday following multiple reports that the British government is in talks to scrap parts of its unfunded package of tax cuts. The British pound traded 1.5% higher at $1.1269 during afternoon deals in London, before paring gains on robust U.S. inflation data. Long-dated U.K. government bonds — known as "gilts" — rallied sharply, pushing yields down to just over 4.41%. Truss and Kwarteng have both insisted the government's proposals are necessary to get the economy growing.

☆ UK lenders expect credit availability to fall - BoE
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: 1 min

LONDON, Oct 13 (Reuters) - British lenders expect less credit to be available during the three months to the end of November across mortgages, unsecured consumer lending and business loans, a Bank of England survey showed on Thursday. The BoE's quarterly credit conditions survey took place between Aug. 30 and Sept. 16, before finance minister Kwasi Kwarteng's "mini-budget" announcement and subsequent market turmoil. Register now for FREE unlimited access to Reuters.com RegisterReporting by David Milliken Editing by William SchombergOur Standards: The Thomson Reuters Trust Principles.

"The chancellor will come to the despatch box," he said when asked by Sky News whether the corporation tax plan would definitely stay. Newspapers reported that some lawmakers who never wanted Truss to replace Boris Johnson as leader in the first place already wanted her out. "I think that changing the leadership would be a disastrously bad idea, not just politically but also economically, and we are absolutely going to stay focused on growing the economy," Cleverly said of Truss. But a fire-sale in the government bond market has driven up borrowing costs and mortgage rates and forced the Bank of England to intervene to protect pension funds. read moreMeanwhile, as Truss battled with the turmoil, she met King Charles for a weekly audience at Buckingham Palace between monarch and prime minister on Wednesday.

☆ UK house price growth slows to weakest since July 2020 - RICS
▼ + stars: | 2022-10-12 | by ( William Schomberg | ) www.reuters.com time to read: +3 min

The RICS house price balance - measuring the difference between the percentage of surveyors reporting price rises and those seeing a fall - fell sharply to +32 in September from +51 in August, signalling a slowdown in price growth. "Looking further out, the picture portrayed by the RICS survey has clearly shifted in a negative direction," he added. After booming during and after the COVID-19 lockdowns as home-owners sought bigger properties, Britain's housing market has cooled recently. Rival lender Nationwide says British house prices failed to rise in monthly terms for the first time since July 2021 in September. A recent cut to Britain's stamp duty tax on property purchases, part of finance minister Kwasi Kwarteng's package of tax cuts, was set to be outweighed by the rise in mortgage costs, RICS said.

"The ongoing squeeze on household finances continues to weigh on growth, and likely to have caused the UK economy to enter a technical recession from the third quarter of this year," Yael Selfin, chief economist at KPMG UK, said. Manufacturing fell by 1.6% from July and more maintenance than unusual in the North Sea hit the mining and quarrying sector which includes oil and gas. "Many other consumer-facing services struggled, with retail, hairdressers and hotels all faring relatively poorly," ONS Chief Economist Grant Fitzner said. GDP in September is likely to be weakened by a one-off public holiday to mark the funeral of Queen Elizabeth. The International Monetary Fund said on Tuesday it expected British GDP to grow in 2023 but only by 0.3%.

☆ UK finance minister says growth plan will address challenges as economy shrinks
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: 1 min

LONDON, Oct 12 (Reuters) - Britain's finance minister Kwasi Kwarteng said on Wednesday that the government's growth plan will address the challenges faced by the country after the latest data showed the economy had shrunk. "Our Growth Plan will address the challenges that we face with ambitious supply-side reforms and tax cuts, which will grow our economy, create more well-paid skilled jobs and in turn raise living standards for everyone," Kwarteng said in a statement. Register now for FREE unlimited access to Reuters.com RegisterReporting by Farouq Suleiman; editing by Sarah YoungOur Standards: The Thomson Reuters Trust Principles.

British financial markets have been under strain since Sept. 23 when finance minister Kwasi Kwarteng announced 45 billion pounds ($50 billion) of tax cuts, without saying how they would be paid for. The Institute of Fiscal Studies think-tank has said the strategy will require 62 billion pounds of spending cuts or tax rises to stop the public debt growing - a daunting proposition after more than a decade of tight government spending. Register now for FREE unlimited access to Reuters.com RegisterTruss and Kwarteng say their tax cuts will boost economic growth and restore the public finances over the medium term. Asked if she was sticking to a pledge not to cut spending made during the Conservative leadership contest, she said: "Absolutely, absolutely." Her spokesman later said that although public spending overall would rise, "there will be deeply difficult decisions to be taken given some of the global challenges we're facing".

Governor of the Bank of England, Andrew Bailey, speaks during the Bank of England's financial stability report news conference, at the Bank of England, London August 4, 2022. And what they can't allow is for the bond market to be overly volatile," said Iain Stealey, CIO of fixed income at JPMorgan Asset Management. U.S. and German 30-year borrowing costs are up just 16 and 33 bps respectively , this month and the contrast highlights the scale of selling gripping Britain's bond market. The unprecedented bond market moves triggered hefty collateral calls on hedging strategies that many funds are still struggling to meet. Bond market volatility has also raised doubts about whether the BoE can press ahead with its plan to sell some of its bond holdings, a process known as quantitative tightening (QT).

Register now for FREE unlimited access to Reuters.com Register"We have announced that we will be out by the end of this week. "My message to the funds involved and all the firms involved managing those funds: You've got three days left now. Investors are nervous that Friday's halt to the BoE's bond-buying might come too soon for some pension funds. But a BoE spokesperson said it had been made "absolutely clear in contact with the banks at senior levels" that the Friday deadline would hold. On Wednesday, it said it was "closely monitoring" liability-driven investment (LDI) funds, which are key to pension funds, ahead of Friday's deadline.

☆ UK PM Truss says she will not cut public spending to fund tax cuts
▼ + stars: | 2022-10-12 | by ( ) www.cnbc.com time to read: +1 min

British Prime Minister Liz Truss said on Wednesday she would not cut public spending. British Prime Minister Liz Truss said on Wednesday she would not cut public spending after her government came under pressure to fund vast tax cuts that have roiled markets and sparked alarm over government finances. The Institute of Fiscal Studies (IFS) said this week that the government needed to find 62 billion pounds ($68.5 billion) of spending cuts or tax rises to stop the public debt growing. Truss was asked at her weekly parliamentary questions if she was still committed to a pledge she made during the Conservative Party leadership contest that she was not planning public spending cuts. "What we will make sure is that over the medium term the debt is falling, but we will do that not by cutting public spending but by making sure we spend public money well," she said.

That was when the BoE moved to quell bond market turmoil triggered by the plans of the new government of Prime Minister Liz Truss for big, unfunded tax cuts. Register now for FREE unlimited access to Reuters.com Register"We have announced that we will be out by the end of this week. "My message to the funds involved and all the firms involved managing those funds: You've got three days left now. Investors are nervous that Friday's deadline for the end of the BoE's bond-buying might come too soon for some funds. The BoE press office said it had no further comment to make beyond those of Bailey on Tuesday in Washington.

☆ 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.

☆ Sentiment in UK finance falls at fastest pace since 2019 - survey
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +1 min

LONDON, Oct 13 (Reuters) - Britain needs to restore stability to its finances to help reverse the fastest drop in financial sector sentiment in three years, a survey by business body CBI and consultants PwC said on Thursday. Profitability growth in the sector remains robust and is expected to increase at a faster pace in October to December, the CBI/PwC survey said. But sentiment in the third quarter to September fell at its fastest pace since September 2019, when it was hit by uncertainty around Brexit negotiations, the survey said. Employment in the sector is set to decline at a quicker pace in the current quarter, perhaps a reflection of the weaker sentiment, while the value of souring bank loans is expected to increase modestly, the survey said. Register now for FREE unlimited access to Reuters.com RegisterReporting by Huw Jones Editing by Bernadette BaumOur Standards: The Thomson Reuters Trust Principles.

☆ Sentiment in UK finance falls at fastest pace since 2019, survey
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +1 min

☆ Morning Bid: The Next Three Days
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +3 min

Well, the Bank of England's Andrew Bailey has crowed, sort of making clear the Liz Truss government can't bank on it defending markets from the fallout of an ill-conceived economic revival plan for more than three days. "You've got three days left now. You've got to get this done," Bailey said on Tuesday, referring to the pension funds. Meanwhile, the U.S. dollar is up, yen is at 24-year lows, yields are soaring, sterling is wobbling and oil is slipping. That comes days after a sweeping set of export controls published by the Biden administration aimed at cutting China off from certain semiconductor chips made anywhere in the world with U.S. equipment.

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