Pound, Gilts Steady as Market Reacts Coolly to Hint of Delay to Fiscal Plans
2022.10.26 04:23
© Reuters
By Geoffrey Smith
Investing.com — The pound pushed higher and U.K. government bonds were broadly steady on Wednesday in early dealings in London, shrugging off suggestions of a delay to the publication of the government’s new fiscal plans.
Chancellor of the Exchequer Jeremy Hunt, who has kept his job under new Prime Minister Rishi Sunak after being appointed by his ill-fated predecessor Liz Truss, had intended to publish what amounts to a new budget for the coming year on October 31st. However, a fellow cabinet minister indicated to Sky News that that deadline might slip a little.
Sunak “of course will want to take some time to work on the detail of that,” Foreign Secretary James Cleverly said, noting that Sunak had himself been Chancellor in Boris Johnson’s government until earlier this year.
Cleverly hinted that any delay, if there is one, will be modest, saying that “We know it needs to come soon. We know people want certainty. We know people want a clear idea of the government’s plans.”
U.K. assets were broadly sanguine about the delay, the overarching feeling still being one of relief that Truss’s plans have been consigned to the trash.
By 03:35 ET (07:35 GMT), the pound was up 0.7% at $1.1550 and up 0.3% at 1.1538. The yield on the benchmark government bond, or Gilt, which had spiked as high as 4.63% on the prospect of higher borrowing to cover Truss’s plans, inched 2 basis points higher to 3.65%. On Tuesday, the 10-year Gilt yield had returned to where it was on the day that Truss’s government had published its plans.
