British Pound Rises as Finance Minister Delivers Policy Announcements

Jeremy Hunt arrives at his home in London after being appointed Chancellor of the Exchequer following the resignation of Quasi Quarteng. Film Date: Friday October 14, 2022.

Aaron Soun | Pa pictures | Good pictures

London – Sterling arose against dollar New England Finance Minister Jeremy Hunt announced on Monday morning that he would deliver parts of his medium-term fiscal plan later in the session.

The pound was up nearly 1% at $1.1288 early Monday, extending gains after the UK Treasury’s report.

The decision follows a dramatic day in British politics on Friday, including major fiscal U-turns by Prime Minister Liz Truss and the sacking of Finance Minister Kwasi Kwarteng. He was quickly replaced by Hunt, who is expected to make a statement at 11 a.m. local time on Monday.

Monday’s announcements come two weeks ahead of schedule. However, the full medium-term financial plan is still to be published on October 31, along with a forecast from the independent Office for Budget Responsibility – something that was absent from the original mini-budget announced on September 23, which rocked the UK. Bond markets.

Hunt said at the weekend that his priority as finance minister was growth, the same as his predecessor’s, but he stressed that it would be “underpinned by stability”.

“The drive to grow the economy is right – more people can get good jobs, new industries can flourish and world-class public services can be preserved.

Biden: Original plan ‘a mistake’

International Monetary Fund A poor judgment on debt-financed tax cuts After they were first announced in late September. UK I saw the bonds A sharp sell and pound A low achievement was achieved In the following days.

In a rare statement, the IMF said the UK’s plans could “increase inequality” and “do not recommend large and untargeted fiscal packages at this time”.

US President Joe Biden weighed in on the British economy over the weekend, describing Truss’ now-abandoned tax cut plan as a “mistake” and expressing concern that other countries’ monetary policies could hurt the US.

“I’m not the only one who thinks it’s a mistake,” Biden said. “I don’t agree with the principle, but it depends on Great Britain.”

Biden also said it was “predictable” that Truce would have to roll back the plans. He spoke to reporters Saturday at an ice cream shop in Oregon.

Pressure on the truss

On Friday, Truss announced A partial reversal of the so-called micro-budget, including scrapping a pledge to roll back the corporation tax hike. Corporation tax will now rise from 19% to 25% as originally planned by his predecessor Boris Johnson’s government.

“It’s clear that some parts of our mini-budget went faster and faster than the markets expected,” Truss said at a brief and hastily arranged press conference on Friday.

Markets Not guaranteed by this move, and the pound fell about 1.1% against the dollar to trade at around $1.1205 following Truss’ speech. Many political observers highlighted his poor performance on Friday, putting even more pressure on Truss with some lawmakers calling for him to step down.

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