Good Monday, and if you’re dreading the working week ahead, you can at least take comfort in the fact you’re not UK’s Kwasi Kwarteng, whose latest raft of proposed tax cuts, specifically benefitting the nations highest earners, appear to have triggered the sharpest sell-off in the Pound in almost 40 years.
Not a great look for the newly appointed Chancellor, whose radically conservative measures are intended to drive growth, make the UK more attractive to foreign investment, and by extension, competitive on the international stage. Ouch. Now Kwarteng has come out to say that he is unconcerned by short-term market moves, positioning himself as a man willing to take tough and unpopular decisions with a long term vision, but make not mistake – he will now be under pretty intense pressure to reassure the markets, since the cost of borrowing, something he intends to do lots of, has gone up as quickly as the pound has has plummeted.
UK Government Bonds yields are going parabolic, the FTSE 100 is tanking, and the likelihood of the Bank of England introducing even steeper rate hikes have shot up accordingly. So. Not exactly the dream start for the new guy, who could well include spearheading Pound to Dollar parity on his extensive list of credentials before the end of the month.