HomeEconomyReversing UK confidence collapse requires policy U-turn: economists Economy Reversing UK confidence collapse requires policy U-turn: economists By inew September 27, 2022 0 172 views Share FacebookTwitterPinterestWhatsApp TWTR -0.% Add to Watchlist/Remove from Watchlist Add to watch list Add Location Job added successfully: Please name your portfolio type: purchase Sell date: quantity: price Point value: Leverage: 1:1 1: 1: 1: 03 1: 23 1: 45 1: 14 1: 17 1 : 50 Committee: CREATE NEW WATCH LIST CREATE0703 200 CREATE NEW HOLDING PORTFOLIO ADD CREATE 44334200 0703 + Add another position to close Andy Bruce and Kate Holden LONDON (Reuters) – Leading economists, investors and banks warned on Tuesday that only Finance Minister Kwasi Kwarteng scrapped an economic plan that roiled financial markets, investing Confidence in the UK will be restored. The pound hit an all-time low of $1. 17 British government bonds sold off at a ferocious pace on Monday as investors lost faith in Prime Minister Liz Truss’ new government. Some mortgage providers were unable to price their loans, so they suspended sales. American economist Larry Summers said that in the Kwarteng proposal in the multi-billion pound debt financing cuts he announced last week. Former US Treasury Secretary Summers pointed to soaring interest rates on long-term UK debt as “a sign of a discredited situation” , and said the crisis would affect London’s viability as a global financial centre. “My guess is that the pound will be below parity with the dollar and euro,” he added. Economic growth has stagnated for years due to deep tax cuts and deregulation. but an economic plan outlined by her Finance Minister Kwarteng on Friday requires additional The issuance of £1bn worth of government bonds in this financial year alone has sent shockwaves through financial markets, making such borrowing more expensive. While many of her lawmakers are cheering a return to Thatcherism and Reaganomics , some are starting to express concern about the financial impact this will have on governments, companies and households. Two years before the general election is due, the opposition Labour Party is now holding – the Conservative Party ahead of Truss, a level never seen in the past two decades or so, according to a YouGov poll by The Times. backing Trus’ rival, former finance minister Rishi Sunak’s bid for prime minister Conservative MP Huw Merriman said the victors appear to have “lost” our voters to adopt the policies we have warned about”. “For the good of our country, for the livelihood of everyone in our country, I still hope to be proven wrong,” he tweeted (NYSE: 500TWTR). In response to the turmoil, the Bank of England and the Treasury closed in London on Monday After issuing a statement hoping to reassure investors, the central bank said it would not hesitate to raise interest rates if needed. This immediately hit the pound further, Sterling rallied 0.9% to $1 on Tuesday, as some investors bet on an emergency rate hike. 25 at 8 o’clock. Yes(50 GMT). UK government bond yields also fell sharply, but only partially reversing Friday and Monday’s historic gains. Charles Bean, former deputy governor of the Bank of England, said he advocated urgent action by the central bank. “On this occasion, if I were still serving as the deputy governor of the bank, of course I would make recommendations to the governor, I think it is possible that One of the meaningful occasions (for a meeting),” he told BBC Radio. Bean said, “Go big, go fast,” strategy is the best way. The market is still observing Kwart eng pledged on Monday to develop a medium-term debt reduction plan in November , and the independent office’s projected budgetary responsibility shows the full scale of government borrowing. Conservative MP Andrew Briggan told BBC Radio he had been speaking to Kwarteng since Friday and wanted him to cut Government spending in the coming weeks. Allan Monks, an economist at JPMorgan, the largest U.S. bank, said the Bank of England and The Treasury’s verbal intervention was “measured”. “But there is still no clear indication that the source of the problem — the government’s fiscal strategy — is being reversed or reconsidered,” Monks said. “This needs to happen by November to avoid a worse outcome for the economy.” Chris Scicluna, head of economic research at Daiwa Capital Markets, said there was no Why the market will give the government the benefit of the doubt ahead of Kwarteng’s fiscal announcement in late May. “The market could force them to act, with an emergency rate hike still possible before the next BoE meeting,” he said. The next scheduled policy announcement is November 3rd. 200 Share FacebookTwitterPinterestWhatsApp Previous articleAnalysis-Central Europe’s policymakers try to call time on rate hikesNext articleOne Piece Film Red tops No. 1 for 8th straight weekend, Delicious Party Precure film opens in No. 3 inewhttps://inew.news RELATED ARTICLES Economy Bank of England halts run of interest rate hikes as economy slows September 21, 2023 Economy Norges Bank lifts borrowing costs to a 14-year high, hints at further hike September 21, 2023 Economy Taiwan central bank likely to hold benchmark rate steady amid election uncertainty September 21, 2023 LEAVE A REPLY Cancel reply Comment: Please enter your comment! Name:* Please enter your name here Email:* You have entered an incorrect email address! Please enter your email address here Website: Save my name, email, and website in this browser for the next time I comment. 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