New Chancellor to make emergency statement on mini-budget.
The UK Treasury announced that the newly appointed Chancellor Jeremy Hunt will announce tax and spending measures on Monday, two weeks earlier than previously scheduled. Monday will test all sides in the UK gilt markets now that the central bank’s emergency bond-buying programme has concluded. Hunt has already spoken to the Bank of England Governor Andrew Bailey, agreeing on the need to repair the public finances.
It was approaching the level at which the Bank of England was recently forced to make an intervention in the bond market that was designed to prop up investments held by pension funds. The pound also lost ground late on Friday. The Bank made clear that its emergency scheme, which involved committing to buying government debt, would not continue beyond Friday, making today another key test.
UK’s FTSE 100 rose for a third consecutive session on Monday as investors awaited fiscal plans from new finance minister Jeremy Hunt after a dramatic loss of confidence among market players in Prime Minister Liz Truss’s government.
Inflation data out in the UK on Wednesday which is expected to see a slight rise YoY to 10%. Which could see further aggressive rate hikes from the Bank of England in the next meeting.
European shares edged up on Monday, driven by gains in energy shares as investors awaited clarity on UK’s fiscal plan amid worries about the growing likelihood of a recession and corporate profits coming under pressure from rising interest rates. Markets saw volatility last week, with investors fretting about the prospects of a recession from aggressive central bank actions to tame inflation and UK’s political turmoil adding to worries.
Putin has said there was no need for more large-scale strikes on Ukraine. Most designated targets had been hit, adding that it was not his aim to destroy the country. Despite these comments there has been reports of the Russian’s using Iranian made suicide drones on the capital city of Kyiv.
Israeli ministers have said it is time for the country to support Ukraine with arms shipments after US officials claimed on Sunday that Iran has secretly agreed to supply Russia with surface-to-surface missiles. The Islamic Republic has been sending drones along with Iranian troops into Ukraine to operate them, siding with Russia in its bloody invasion.
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