Storbritannia advarte om at "helt uansvarlig" politikk kan føre pundet under dollar- og europaritet - business live

Virgin Atlantic’s chief executive has called on the UK government to “consider reversing” some of the policies announced last week, to prop up the pound.

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Shai Weiss told a press conference in London that sterling’s fall in value is hurting the economy and hurting consumers, and fuelling the UK’s inflation cycle.

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Weiss said that Virgin Atlantic had taken some “very smart financial positions” to ease the impact of the weak pound on its business [which suggests they’re hedged against a fall in sterling]

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But the company is concerned about the economic environment. And Weiss suggested that Liz Truss should take a “difficult decision” to reverse sterling’s slide, arguing:

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“Sometimes all of us in this room should be humble enough to say: ‘If I did something that is not working, maybe I should reverse course.’

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“That is not a bad thing to do.”

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That would mean dropping some of the tax-cutting measure in the mini-budget that will drive up borrowing, fuel inflation, and worsen Britain’s current account deficit.

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Wess said Truss should take steps to protect the country from the loss of confidence in international markets, which risks driving up interest rates, and hurting the economy.

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“The message to Government is pretty clear in my mind. Prime Minister Liz Truss has taken difficult decisions upon entering into the role

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“Maybe you need to take a more difficult decision to reverse the declining pound and ensure that this country is not left with unsustainable perceived weakness in international markets, which of course then impact interest rates, impact consumers, impact mortgage rates, impact the entire economy.

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Virgin Atlantic chief urges UK government to reverse course and lift pound https://t.co/ZO0SeG1qPr

— Financial Times (@FT) September 27, 2022

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Nearly 300 mortgage deals have been pulled in the last 24 hours by banks and building societies after the fall in the pound fuelled forecasts of a jump in interest rates.

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The Bank of Ireland, Clydesdale Bank, Post Office Money and a slew of building societies including Monmouthshire, Furness and Darlington are among the names to have withdrawn products, our consumer affairs correspondent Zoe Wood writes.

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In a statement Bank Of Ireland said that:

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“due to changes in the financial market, we don’t currently have any new rates available for new or existing customers. We’ll launch a new range of mortgage rates as soon as possible”.

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There are now 3596 residential mortgage deals available, down from 3880 at the start of this week, according to data firm Moneyfacts. At the end of last year would be borrowers would have had 5315 products to choose from.

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Rachel Springall, finance expert at Moneyfacts, said the market was extremely volatile at the moment so borrowers need to seek independent advice to assess what their best options are right now:

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“The upheaval in the mortgage market may cause frustration amongst both borrowers and brokers as they see deals disappear overnight.”

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The overnight reduction in deals – the equivalent of about 7% – comes as lenders struggle to accurately price their products after last week’s mini budget sent the pound and government bonds plunging.

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Virgin Money and Skipton Building Society were among the lenders who pulled their range of mortgage deals on Monday, while Halifax is withdrawing its fee-paying mortgage products

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The German government is concerned that Britain is conducting a ‘major’ experiment, by cutting taxes and boosting borrowing just as the central bank is raising interest rates.

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German finance minister Christian Lindner raised doubts about the British government’s plans to accelerate spending while the central bank tightens policy to rein inflation.

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In another sign of rising international concern, Lindner warned:

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“In the UK, a major experiment is starting as the state simultaneously puts its foot on the gas while the central bank steps on the brakes,”

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Speaking last night, at an event hosted by the Frankfurter Allgemeine Zeitung newspaper, Lindner suggested that it wouldn’t end well….

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“I would say we wait for the results of this attempt and then draw the lessons.”

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German finance minister says a major experiment is underway in the UK. Indeed. pic.twitter.com/rmmg2CiXvp

— Patrick Wintour (@patrickwintour) September 27, 2022

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Larry Summers, a former US Treasury secretary, has warned that the UK government’s ‘utterly irresponsible’ plans could drag the pound below parity against the euro, as well as the dollar.

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Summers has heavily criticised chancellor Kwasi Kwarteng for undermining credibility by saying ‘incredible things’ about planning more tax cuts — those weekend comments pushed the pound to a record low of $1.0327 on Monday.

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Summers says he was “very pessimistic about the consequences of utterly irresponsible UK policy on Friday,” but didn’t expect the markets to get so bad so quickly.

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Summers also suggests the Bank of England should have taken more decisive action, rather than its ‘timid’ statement yesterday.

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Summers says:

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The first step in regaining credibility is not saying incredible things. I was surprised when the new chancellor spoke over the weekend of the need for even more tax cuts.

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I cannot see how the BOE, knowing the government’s plans, decided to move so timidly.

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Summers pointed to surging interest rates of long-dated British debt as a “hallmark of situations where credibility has been lost”.

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“This happens most frequently in developing countries but happened with early Mitterrand before a U-turn, in the late Carter Administration before Volcker and with Lafontaine in Germany.”

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Summers warns that there could be global consequences from a currency crisis in the pound, as it is a reserve currency.

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The magnitude of Britain’s trade current account deficit underscores the seriousness of its challenges. My guess is that pound will find its way below parity with both the dollar and euro.

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Currently the pound is trading at €1.12, having hit €1.08 in yesterday’s crash, the weakest since the end of 2020.

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Here’s the full thread.

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I was very pessimistic about the consequences of utterly irresponsible UK policy on Friday. But, I did not expect markets to get so bad so fast.

A strong tendency for long rates to go up as the currency goes down is a hallmark of situations where credibility has been lost.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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This happens most frequently in developing countries but happened with early Mitterrand before a U turn, in the late Carter Administration before Volcker and with Lafontaine in Germany.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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British credit default swaps still suggest negligible default probabilities, but they have risen very sharply. I cannot remember a G10 country with so much debt sustainability risk in its own currency.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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The first step in regaining credibility is not saying incredible things. I was surprised when the new chancellor spoke over the weekend of the need for even more tax cuts. I cannot see how the BOE, knowing the government’s plans, decided to move so timidly.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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The suggestions that seem to have emanated from the Bank of England that there is something anti- inflationary about unbounded energy subsidies are bizarre. Subsidies affect whether energy is paid for directly or through taxes now and in the future, not its ultimate cost.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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The magnitude of Britain’s trade current account deficit underscores the seriousness of its challenges. My guess is that pound will find its way below parity with both the dollar and euro.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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I would not be amazed if British short rates more than triple in the next two years and reach levels above 7 percent.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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I say this because US rates are now projected to approach 5 percent and Britain has much more serious inflation, is pursuing more aggressive fiscal expansion and has larger financing challenges.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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Financial crisis in Britain will affect London’s viability as a global financial center so there is the risk of a vicious cycle where volatility hurts the fundamentals, which in turn raises volatility.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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A currency crisis in a reserve currency could well have global consequences. I am surprised that we have heard nothing from the IMF.

— Lawrence H. Summers (@LHSummers) September 27, 2022

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Kwasi Kwarteng is meeting with Britain’s top bankers and other senior City figures on Tuesday, in planned talks that are likely to turn into a crisis meeting after the sell-off of the pound and government bond market meltdown.

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Banks emerged among the biggest beneficiaries of Friday’s mini-budget when the chancellor scrapped the EU banker bonus cap and the top 45% rate of income tax, cut stamp duty to prop up the housing market and trailed “an ambitious package of regulatory reforms” to be unveiled this autumn.

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However, the announcement sent the pound and government bonds plunging, as the scale of the tax cuts, which overwhelmingly benefit the better-off, shocked markets and prompted worries about how they will be paid for.

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Here’s the full story:

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The panicky market reaction to the mini budget means it will be harder for Kwasi Kwarteng to balance the books.

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Resolution Foundation chief executive Torsten Bell warns it may mean £15bn of additional ‘tough choices’ (spending cuts, or tax rises).

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Kwasi Kwarteng said yesterday he’ll announce how the government will get debt falling as a share of GDP in the medium-term, in November.

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Bell told Sky News it will be tough.

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“The world we are heading for is a bumpy few weeks. The Chancellor is now going to have quite a tough time because he has now set out plans to balance the books in November. That is going to be very hard.

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“Actually balancing the books in November is going to be harder than it would have been to show you are balancing the books last week because higher interest rates will make it harder to do.

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“You might need 15bn-worth of tough choices now that you didn’t need last Friday.”

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Bell also explained that the markets don’t think the government’s plans are actually serious:

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“In the end, lower taxes will mean worse public services, or other people’s taxes having to go up, and it is those choices and ducking those choices that markets are looking at and saying that is not what serious policy making looks like.”

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The gilts sell-off with 10 year bonds yielding 4.2 %, and markets now expecting 6 %base rates ( implying mortgage rates 7.5 % +) has already killed off any stimulatory impact of the mini budget. Expect close to incredible spending cuts in November. Mad! And nobody voted for it

— Will Hutton (@williamnhutton) September 27, 2022

\n”,”url”:”https://twitter.com/williamnhutton/status/1574672669609451521″,”id”:”1574672669609451521″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”d97f413b-c887-4e20-bc43-6352b52587c4″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664266357000,”blockCreatedOnDisplay”:”09.12 BST”,”blockLastUpdated”:1664269585000,”blockLastUpdatedDisplay”:”10.06 BST”,”blockFirstPublished”:1664267968000,”blockFirstPublishedDisplay”:”09.39 BST”,”blockFirstPublishedDisplayNoTimezone”:”09.39″,”title”:”Market mayhem means balancing the books will be harder”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.40 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”6332a34d8f08f9373688e9d5″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Former Bank of England Deputy Governor Charlie Bean has suggested that the BoE should have called an emergency meeting this week to tackle the sterling crisis.

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Bean says that the Bank are rightly reluctant to have emergency meetings every time there’s turmoil in the financial markets.

“,”elementId”:”ff0b813c-171a-423d-8976-d7ae92ff1501″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

But on this occasion, it might have made sense.

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Speaking on Radio 4’s Today Programme, Bean explains:

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“On this occasion if I had still been at the bank in my role as deputy governor I certainly would have been counselling the governor that I think this is one of those occasions where it might have made sense (to call a meeting),”

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Bean adds, though, that the Bank would have needed to have taken action (by raising interest rates).

“,”elementId”:”98e85624-629d-4a68-a103-e6fd10829be4″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

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“The key thing is, if you call it, you have to take significant action.”

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Bean adds that the lesson of these episodes, where a currency is weakening and longer-term interest rates are rising, is that “you go big and you go fast”.

“,”elementId”:”7a1bdaa6-742f-41c6-af8c-6af463b1e084″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

⚠️ FORMER BOE DEPUTY GOVERNOR CHARLIE BEAN: IF YOU CALL AN EMERGENCY CENTRAL BANK MEETING, YOU HAVE TO TAKE SIGNIFICANT ACTION

– Reuters via https://t.co/ymHY6x3NYD

— PiQ  (@PriapusIQ) September 27, 2022

\n”,”url”:”https://twitter.com/PriapusIQ/status/1574659101233221632″,”id”:”1574659101233221632″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”d45b9617-bf4e-450e-9e37-fe554dcbfedd”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664262989000,”blockCreatedOnDisplay”:”08.16 BST”,”blockLastUpdated”:1664266260000,”blockLastUpdatedDisplay”:”09.11 BST”,”blockFirstPublished”:1664265069000,”blockFirstPublishedDisplay”:”08.51 BST”,”blockFirstPublishedDisplayNoTimezone”:”08.51″,”title”:”Former deputy Bank governor: emergency meeting may have made sense”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.40 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”6332a1bd8f08f9373688e9cc”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Shadow health secretary Wes Streeting has warned that the turmoil in the mortgage market this week, which forced several lenders to pull deals, is just the ‘tip of the iceburg’.

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He told Sky News:

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“All of us are frankly still recovering from our jaws hitting the floors last week with that budget from Kwasi Kwarteng.

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“And the real world consequences we’re seeing overnight, the withdrawal of mortgage products, tell us about the extent to which our own Chancellor in this country has frightened the markets.

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“This is just the tip of the iceberg, if interest rates go up in the way that some people are predicting that’s going to be huge additional costs to people with mortgages.

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“And what was the Chancellor’s answer yesterday? ‘Don’t worry folks, in November I’m going to come up with some new fiscal rules – ie I’ve ignored all the ones I’ve already got and I’m rewriting the rules and making them up as I go along’.

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Streeting added that “This isn’t serious leadership – it’s a reckless gamble,”

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The key, dangerous, charge against Liz Truss and Kwasi Kwarteng is that they lack the competence to get their “new era” for the UK economy off the launchpad, our financial editor Nils Pratley explains:

“,”elementId”:”bd30c570-ac16-49bb-804a-6cb935248ff5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Nils warns that a lot of financial credibility has been shredded in just two trading days, writing:

“,”elementId”:”1d59f109-6e63-494d-bd07-07251920d5c8″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

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Do they understand that, when you’re running a large current account deficit and need to borrow the thick end of £200bn next year, financial markets matter?

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The prime minister and chancellor might have expected a bumpy reception, but what they got was an open revolt in markets and some extraordinary comments from grown-up economists at serious firms. “Hope is not a strategy,” said Nomura’s team, predicting parity for the pound against the dollar by year end. “Investors seem inclined to regard the UK Conservative party as a doomsday cult,” said Paul Donovan at UBS Global Wealth Management.

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While Monday morning’s record low against the dollar grabbed the headlines, sterling has also fallen about 8% on a trade-weighted basis in two months. That is a chunky move, but one dwarfed by what’s happened with gilts. It cost the government 1.9% to borrow for 10 years in early August; that rate was 3.1% a week ago and is now 4.1% as the market tries to work out how far the Bank of England will have to raise interest rates.

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Virtually nobody accepts the notion that the biggest tax cuts since 1972 can be anything other than inflationary.

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“,”elementId”:”4cd71855-3d24-4f7a-baf8-74de82c644c0″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Here’s the full piece:

“,”elementId”:”6c86b9a6-4dca-49a7-bfd5-be42be085557″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/nils-pratley-on-finance/2022/sep/26/the-political-naivety-of-trussonomics-is-staggering”,”text”:”The political naivety of Trussonomics is staggering | Nils Pratley”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”5f0652da-5d28-48ab-b392-453a81f7f9a6″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664262273000,”blockCreatedOnDisplay”:”08.04 BST”,”blockLastUpdated”:1664262492000,”blockLastUpdatedDisplay”:”08.08 BST”,”blockFirstPublished”:1664262492000,”blockFirstPublishedDisplay”:”08.08 BST”,”blockFirstPublishedDisplayNoTimezone”:”08.08″,”title”:”The political naivety of Trussonomics is staggering: Nils Prately”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.40 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”63329e3b8f08d07ba0ad6c98″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Consumers are going to suffer from sterling’s tumble.

“,”elementId”:”7ed39a40-c9d3-44f2-a922-9a9fd309a392″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

A weak pound pushes up the cost of imported food, petrol, cars and consumer goods – which firms will pass on to consumers

“,”elementId”:”2c4b4724-a563-44af-9e95-89337ff4be39″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

It will also drive up the cost of mortgages (as the Bank of England is expected to hike interest rates to prop up sterling), and make foreign holidays pricier.

“,”elementId”:”ea0c786d-899d-4c1a-9f23-5053dedc9111″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Here’s a full explanation:

“,”elementId”:”626465c8-223d-44a5-9864-2857f89f7e0f”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2022/sep/26/shock-after-shock-how-the-weaker-pound-could-affect-you”,”text”:”‘Shock after shock’: how the weaker pound could affect you”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”f43116e2-ed58-49f6-b6a5-c9f36ff0932e”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664261691000,”blockCreatedOnDisplay”:”07.54 BST”,”blockLastUpdated”:1664261816000,”blockLastUpdatedDisplay”:”07.56 BST”,”blockFirstPublished”:1664261816000,”blockFirstPublishedDisplay”:”07.56 BST”,”blockFirstPublishedDisplayNoTimezone”:”07.56″,”title”:”What the weak pound means for you”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.40 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”63329bdb8f08d07ba0ad6c8e”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Giving tax cuts to the rich is not a vote winner.

“,”elementId”:”c0eb8899-4fd4-4636-a6e8-73e868bc1b62″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

A YouGov survey for The Times has found that Labour has taken its biggest opinion lead over the Tories since the firm began polling in 2001.

“,”elementId”:”a8be436f-b379-4e15-8ab5-f844ec4c2b1d”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Labour are 17 percentage points ahead of the Conservatives, with 45% support, vs 28% for Liz Truss’s party.

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The largest Labour Party lead with YouGov since 2001 👇 pic.twitter.com/Q5cbBOISZK

— Karl Turner MP (@KarlTurnerMP) September 26, 2022

\n”,”url”:”https://twitter.com/KarlTurnerMP/status/1574519629443399680″,”id”:”1574519629443399680″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”0c90e8fd-5a82-4b03-baf5-2d64692975f8″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The survey revealed widespread public opposition, including among Tory supporters, to the tax-cutting measures announced by the chancellor last week.

“,”elementId”:”3de22dd2-763e-4cb8-9645-b76171c79b1c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwarteng’s decision to scrap the 45% rate of tax for those earning more than £150,000 was opposed by 72% of voters, including 69% who backed the Conservatives in 2019.

“,”elementId”:”59737668-2aa2-4533-a33e-e8a759511502″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Just 19 per cent of voters thought Kwarteng’s budget was “fair” — the worst polling figure since YouGov began to ask the question in 2010.

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Here’s the full story.

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The Budget in numbers:

57% think it's unfair

53% say it won't boost growth

60% think it's unaffordable

43% too risky

BUT income tax cut and NI cut very popular

— Steven Swinford (@Steven_Swinford) September 26, 2022

\n”,”url”:”https://twitter.com/Steven_Swinford/status/1574498187750129690″,”id”:”1574498187750129690″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”42030021-fd6b-4026-843b-71aaadc369c4″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

Scrapping 45p rate, removing bankers bonus cap & axing corporation tax hike overwhelmingly seen as wrong priority

Public supportive of other measures such as cutting income tax & national insurance

— Steven Swinford (@Steven_Swinford) September 26, 2022

\n”,”url”:”https://twitter.com/Steven_Swinford/status/1574498425684606989″,”id”:”1574498425684606989″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”6ce52362-e519-4236-973f-b3877adfbb92″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664261083000,”blockCreatedOnDisplay”:”07.44 BST”,”blockLastUpdated”:1664261521000,”blockLastUpdatedDisplay”:”07.52 BST”,”blockFirstPublished”:1664261521000,”blockFirstPublishedDisplay”:”07.52 BST”,”blockFirstPublishedDisplayNoTimezone”:”07.52″,”title”:”Labour surges in polls as voters recoil from mini-budget”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.40 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”633294c78f0877eea340605a”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwasi Kwarteng faces a fraught meeting of City bosses today at the Treasury, following the horrific market reaction to his tax-cutting mini-budget.

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Kwarteng and new City minister Andrew Griffith are due to welcome senior leaders from banks, insurance companies and asset managers today, Bloomberg reports.

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The aim of the meeting was originally to come up with some bold ideas for the government’s so-called “Big Bang 2” plans to re-energise the City.

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But the slump in the pound, and the brutal selloff in gilts, mean it will be more of a crisis summit than a convivial conversation. Kwarteng will not be able to get away with dismissing the sterling crisis as mere market gyrations.

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Bloomberg explains:

“,”elementId”:”9ca40e4c-cb58-4b17-b393-1c1f03101df6″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

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Bankers were meant to be wowed by measures such as the end of a cap on their bonuses and the scrapping of the 45% top tax rate, and the early reaction from industry bodies was positive on Friday.

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But Monday’s markets meltdown, which sent the UK’s borrowing costs soaring, killed off those good vibes.

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Kwarteng will need to demonstrate that he understands the seriousness of the dramatic drop in the pound and gilts rather than characterizing them as short-term fluctuations, several financiers said. Attendees will want answers on how he can restore investor confidence.

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“,”elementId”:”476279fe-c0bf-47d3-9283-c55846ace61d”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

Kwarteng heads for a difficult meeting with London’s top bankers https://t.co/Qc3WdYv7Dm via @GriffithsKath_ @harrynwilson @WilliamShaw546 pic.twitter.com/WsWnNSVPTd

— Zoe Schneeweiss (@ZSchneeweiss) September 26, 2022

\n”,”url”:”https://twitter.com/ZSchneeweiss/status/1574484201059061761″,”id”:”1574484201059061761″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”98efa89c-da91-4ab0-b274-6b93b77a5348″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664260508000,”blockCreatedOnDisplay”:”07.35 BST”,”blockLastUpdated”:1664260646000,”blockLastUpdatedDisplay”:”07.37 BST”,”blockFirstPublished”:1664260646000,”blockFirstPublishedDisplay”:”07.37 BST”,”blockFirstPublishedDisplayNoTimezone”:”07.37″,”title”:”Kwarteng facing difficult meeting with London’s top bankers today”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.40 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”63328caa8f0877eea340600e”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

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Investors are bracing for another day of sterling volatility, as the crisis created by the government’s reckless mini-budget continues to grip the markets.

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The pound is slightly higher in early trading, clinging onto the $1.08 mark, after hitting an alltime low around $1.035 yesterday morning. It’s still down 7% this month.

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Sterling is at $1.08 at the moment #GBP #USD #Dollar pic.twitter.com/uPrfbiQPf2

— Gemini Guy (@Gemini_Guy_1981) September 27, 2022

\n”,”url”:”https://twitter.com/Gemini_Guy_1981/status/1574638409489973248″,”id”:”1574638409489973248″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”fdfd4b72-be15-4798-a1e1-5c2493ea3bf2″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

Sterling up 1% this morning! 😃

To $1.08 🙄

— Andy Bruce (@BruceReuters) September 27, 2022

\n”,”url”:”https://twitter.com/BruceReuters/status/1574638733760073728″,”id”:”1574638733760073728″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”4d5d90b2-2297-4fde-80cc-6183b9deaca5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

And the pound still looks extremely vulnerable, as the Treasury and the Bank of England struggle to prevent a full-scale loss of financial market confidence.

“,”elementId”:”08dffc51-031f-450c-85f8-3d6b8a9225b9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

UK government bonds are on track for their worst month on record, going back to the 1950s, as international faith in Britain is hammered by Kwasi Kwarteng’s binge of borrowing to fund tax cuts, mainly benefiting the wealthy.

“,”elementId”:”d56630c1-ea74-4364-a880-becb4622a002″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The selloff has pushed the cost of borrowing for 10 years up to 4.1%, from 3.1% before the mini-budget.

“,”elementId”:”3466292f-ff40-4206-9c3b-df2a9c6ef537″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Jim Reid, strategist at Deutsche Bank, says:

“,”elementId”:”eb856480-c04f-4c6d-bdb4-55a16a5c9f94″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

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UK assets have remained at the eye of the storm as the negative reaction to the government’s mini-budget on Friday continued.

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The country’s government bonds were completely routed for a second day.

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The staggering slump in gilt prices in recent days has forced several mortgage providers, including Virgin Money and Skipton Building Society, to pull deals, with economists predicting that interest rates could rise to 6% by next summer.

“,”elementId”:”894f6f97-e9aa-4d39-b804-db8b38f70885″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

That would leave many households facing massive increases in mortgage repayments, which will be impossible for some to meet.

“,”elementId”:”fd4a203a-ac9b-4eb5-8aac-755c3040476d”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

If mortgage rates rise to 6%—as implied by markets’ current expectations for Bank Rate—the average household refinancing a 2yr fixed rate mortgage in the first half of 2023 will see *monthly* repayments jump to £1,490, from £863. Many simply won’t be able to afford this (1/2) pic.twitter.com/hkoZCcSfjJ

— Samuel Tombs (@samueltombs) September 26, 2022

\n”,”url”:”https://twitter.com/samueltombs/status/1574429056593977344″,”id”:”1574429056593977344″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”04dc0e9d-ff75-4c57-b73a-3b6cb49de1cc”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Yesterday, the Bank of England resisted pressure to implement an immediate emergency rise in interest rates, which put fresh selling of the pound.

“,”elementId”:”a15cb702-218f-4e2a-ae29-dffcada43161″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2022/sep/26/pound-comes-under-new-pressure-after-bank-england-fails-announce-rate-hike”,”text”:”Pound comes under new pressure after Bank of England fails to raise rates”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”6c131b8f-06ab-4061-a76d-d67fd3a999f4″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The pound’s calamitous slide to record lows has gripped global markets too, and even increased the risk of a global recession.

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And Labour leader Sir Keir Starmer is expected to depict Labour as the party of “sound money” and fiscal responsibility at his keynote speech to the Labour conference in Liverpool.

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The agenda

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12.30pm BST: ECB president Christine Lagarde speaks on a panel on financial stability challenges related to digitalisation of financial services

1.30pm BST US durable goods orders for August

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