Pound Wobbles Again as Kwarteng Denies Bringing Forward Spending Plans
2022.10.04 10:27
© Reuters
By Geoffrey Smith
Investing.com — The and U.K. government markets faltered on Tuesday after Chancellor of the Exchequer Kwasi Kwarteng insisted that he won’t present a more detailed version of his spending plans for another six weeks, dashing hopes for more immediate clarity on a fiscal policy course that has spooked markets.
In an interview with GB News television, Kwarteng confirmed that his medium-term spending plan will be published on November 23rd, as initially indicated. That went against a Financial Times report – sourced to unnamed senior Conservative Party figures – that the plan, along with independent assessments from the Office for Budget Responsibility, would be accelerated in order to reassure currency and bond markets.
The pound had hit an all-time low against the dollar while government bond yields surged over half a percent after Kwarteng announced some £45 billion ($48 billion) of tax cuts in his first act as Chancellor of the Exchequer under new Prime Minister Liz Truss. At the time, Kwarteng had not allowed the OBR to comment on the measures, prompting accusations that he was evading proper institutional scrutiny of plans that many characterized as unsustainable.
The pound rebounded as high as $1.1425 overnight after the FT’s report. However, it pared those gains after Kwarteng’s interview, falling back to $1.1352 before recovering on the back of some weak U.S. labor market data.
