This is a selection from our Daily "What The Papers Say" Review, published on Twitter and Facebook seven days a week ...
Interest Rates Rise to 3.0% ...
Interest rates have risen by 0.75 percentage points to 3 per cent in the biggest single rate rise since 1989 as the central bank battles double-digit inflation.
The economic downturn, which is thought to have started this summer, will last until mid-2024, according to the central bank. It will be longest recession since the First World War but it will not be as deep as the downturn that followed the financial crisis of 2008.
Inflation, which hit 10.1 per cent in September, is expected to peak at 11 per cent this winter before falling next year. Further interest rate rises are on the way but they are unlikely to go as high as investors’ predictions of 5.2 per cent, rate-setters said in the minutes of their meeting this morning. The Bank’s inflation target is 2 per cent.
Rishi Sunak inherits inbox of anarchy as he takes over as PM of country in crisis ...
Rishi Sunak is set to take office today Tuesday as Britain’s latest Prime Minister. He will take on one of the most daunting political inboxes in modern British history.
The former finance minister will be tasked with remedying multiple crises, including soaring inflation, rising debt, higher energy costs, soft currency, industrial unrest and a battered economy.
Sunak has warned that the U.K. faces a “profound economic challenge,” and pledged to instil “stability and unity”, not least in his own party.
Rishi Sunak closes in on Downing Street after Boris Johnson pulls out of leadership race ...
Former Finance Minister Rishi Sunak looks set to become the next prime minister of the U.K., with votes to be counted Monday afternoon.
Sunak is believed to have around 180 public backers, according to Sky News, while Mordaunt is thought to have around 25. with 357 lawmakers eligible to vote, Rishi Sunak appears set for a coronation.
Gilt yields fell and Sterling rallied on the news. Ten year gilts trade at 3.85% this morning. We expect ten year gilts to trade between 4.0% and 4.5% in the final quarter of the year.
Sterling trades higher at $1.1318 having touched $1.375 in overnight trade.
Jeremy Hunt, the new UK chancellor, today scrapped the bulk of Kwasi Kwarteng’s tax cuts 17th October 2022 ....
Jeremy Hunt, the new UK chancellor, today scrapped the bulk of Kwasi Kwarteng’s tax cutsin a desperate effort to calm markets. In an emergency move to rebuild the government’s fiscal credibility, Hunt ripped up the government’s tax and spending plans, putting a wrecking ball through the economic policy of prime minister Liz Truss.
Markets responded positively to signs the UK government was finally getting a grip on Britain’s public finances. Gilts and sterling extending the rally after the chancellor ’s morning statement. The 30 year gilt yield trades at 4.39%.
Ten year gilts trade at 3.962, it looks like an over reaction. We expect ten year gilts to trade between 4.0% and 4.5% in the final quarter of the year. Sterling trades higher testing the $1.13 level …
Not so much the kindness of strangers, just the generosity of old friends ...
The Treasury will have to sell £234 billion of gilts this year. The Bank will have to step in as the buyer of last resort.
Nothing Cute about QT. The Old Lady will have to abandon plans to sell off £80 billion of government debt. The Bank held 33% of the £2.4 trillion of gilts in issue at the start of the year, according to the Debt Management Office.
Government debt is set to rise by almost £500 billion over the next three years. Government spending plans by "inky blots and rotten bonds sustained. Johnny Foreigner's holdings have slipped below 30%.
The Old Lady of Threadneedle street will have to step up. This is no time for The Bank of England to shirk the task and shrink the balance sheet.
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