Britain: Sterling collapses – At a 37-year low after the Truss announcements

Britain: Sterling collapses – At a 37-year low after the Truss announcements
Britain: Sterling collapses – At a 37-year low after the Truss announcements

The measures announced by the government regarding the rapid reduction of taxation, which consequently brings a large reduction in government revenues and increased borrowing needs, lead the British market to collapse.

Specifically, after the measures announced by the government of Liz Truss, the British pound fell to a 37-year low, with the exchange rate at 1.1077 dollars. The yield on the 10-year Treasury note jumped 32 basis points to 3.81%.

As Euro2day reports, the Tras is set to implement the most radical package of tax cuts for the UK since 1972, slashing contributions to both workers’ and companies’ wages, announcing £45bn of tax cuts in a bid to boost the long-term potential of the economy.

As reported by Bloomberg, the Minister of Finance Kwasi Kwarteng he also cut stamp duty on property purchases and confirmed support for households and businesses on their energy bills, costing £60bn over the next six months.

According to the Guardian, the tax cuts – the biggest in 50 years – will help boost borrowing by £411bn over the next five years, the Resolution Foundation has estimated.

Following today’s announcement of the measures, traders are pricing in a 100 basis point rate hike at the Bank of England’s next meeting in November.

The article is in Greek

Tags: Britain Sterling collapses #37year Truss announcements

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