The pound staged a recovery yesterday as the British government made the mother of all U turns on its fiscal policy.
However, those gains have been at least partially reversed themselves this morning.
In an effort to calm the markets and bring down the cost of borrowing – for households and the government – the new Chancellor of the Exchequer, Jeremy Hunt, abandoned almost the entire raft of tax cuts put in by the Liz Truss/Kwasi Kwarteng partnership less than a month ago.
To a large extent this appears to have worked, with the cost of government borrowing coming down as bond yields rose along with the pound. However, Hunt also said that the multibillion-pound plan to help households and small businesses with energy bills would only last until April.
Elsewhere in the world, college-educated Americans with incomes below $125,000 can start applying for student debt cancellation of up to $20,000. “This is a game changer for millions of Americans”, said President Biden.
In France there have been strikes and fuel shortages following blockades of oil refineries, in protests over the rising cost of living.
A relatively quiet start of the week continues for data, but matters liven up with UK inflation tomorrow morning. There is also likely to be extra focus on Liz Truss’s performance at Prime Minster’s Questions tomorrow, as Conservative MPs ponder leadership challenges.
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