Key events
Filters Beta
When asked if there is a crisis, Phillip said:
There was a problem with the energy situation and we talked about that and if there are other challenges then the government will fix the independent central bank where we are in power or in power.
Here’s our full story on former Bank of England Governor Mark Carney’s comments. Threadneedle Street accused the Lease Trust Government of “undermining” the country’s economic institutions and working at “cross-purposes”.
The Chief Secretary of the Treasury has drawn ‘iron discipline with spending restrictions’
Chris Phillips, the Chancellor’s No.2 at the Treasury, is on Radio 4’s Today programme.
If we can achieve economic growth, which is our aim, then wages will rise and new and better jobs will be created and ultimately public services such as health, NHS and so on will be paid for by taxes.
Then he trumpets the government’s energy price freeze.
We’ve seen global markets suffer a lot of volatility over the past six to nine months, with strong dollar strength against the euro, yen and sterling. We have seen interest rates increase around the world and interest rates in other countries like the USA have increased even more.
This is not the only country where volatility has been observed. The Bank of Japan had to intervene specifically in the yen-dollar market a few days ago. But if people need to intervene to protect their family finances, they should ensure that it is the government and the independent Bank of England.
These bond products have been increasing globally for several months.
Asked about scrapping the top 45p tax rate, he defended the move.
That was one-twentieth, less than 5% of the total budget.
The tax measures are designed to make us globally competitive.
He also promised “iron discipline in sticking to existing spending targets.”
When asked whether the government would present the budget statement on November 23, he said no.
The statement was corrected for the 23rd [November].
Housing and retail stocks are taking a big hit this morning, with one of Britain’s biggest housebuilders, Barrett, the biggest loser on the FTSE 100, down 8.6%.
Retailers Next and Ocado and property developer RhythmMove were among the biggest losers.
He then warned this morning that the UK could be headed for a second cost-of-living hike next year as the fall in the value of the British pound leads to further price rises. Our retail reporter Sarah Butler reports.
The fashion and home goods retailer cut its full-year sales and profit forecasts after a disappointing August and fears that persistent inflation will put pressure on consumers’ spending.
The FTSE 100 fell 87 points, or 1.25%, to 6,918 after the opening bell.
Liz Truss has broken her silence since Friday’s budget cuts and has spoken publicly in a round of local radio interviews.
The prime minister defended the unsupported tax cut package, saying she was prepared to take “controversial and difficult decisions”.
You can read more on our Politics Live blog with Andrew Sparrow.
Estate agents talk about the problems in the British housing market
Estate agents are speaking out about the crisis in Britain’s housing market following last Friday’s quarterly Budget.
Almost 1,000 mortgage products were withdrawn from the market overnight, Moneyfacts reported yesterday.
Ian Wyne Jones, one of Gwinnett’s leading estate agents in North Wales, told BBC Radio 4’s Today programme:
What I’ve seen in the last 24 hours, is that many of my clients’ mortgage offers have been pulled, properties have been destroyed in terms of sales, chains have collapsed, a lot of money has been wiped from the pipeline. It doesn’t look good at the moment.
We had about four properties yesterday where lenders were pulling their offers.
The sudden change is threatening to derail the housing market, with borrowers saying they can’t get loans or have had temporary offers revoked, while others are paying hefty fines to break their current deals and lock in fixed rates for the long term. , The Guardian’s Lisa Carroll and Clea Scopelli report.
Introduction: pound slides; Former BOE chief Carney accused the government of ‘failing’ the bank.
Good morning, and welcome to our rolling coverage of business, the global economy and financial markets.
Criticism of Kwasi Kwarteng’s meager budget last Friday – a £45bn package of unfunded tax cuts that mainly benefit the wealthy – continues to mount.
Sir Mark Carney, who was governor of the Bank of England before Andrew Bailey, accused the UK government of “weakening” the UK’s economic institutions. He told the BBC.
Unfortunately, holding a partial budget, in these conditions – difficult global economy, strong financial market position, working with the bank on different objectives – has made very dramatic movements in the financial markets.
There was a lower cut without the OBR forecast, with some institutions advocating a general approach. [from the fiscal watchdog, the Office for Budget Responsibility]
The message from financial markets is that there is a limit to unfunded spending and unfunded tax cuts in this area, and the cost of those is higher borrowing costs for the government and mortgage holders and borrowers up and down the country.
Despite the Bank of England’s emergency intervention to stabilize the bond market, the pound continues to slide. This has calmed nerves in the bond and stock markets, while sterling remains under pressure.
Asian stock markets were mostly higher, with Japan’s Nikkei down 0.95 percent and Hong Kong’s Hang Seng down 0.35 percent.
Sterling is down 1.1% at $1.0766 this morning. The euro weakened by 0.75% to $0.9663 against the dollar. The dollar has generally strengthened on the back of safe-haven appeal and the Fed’s interest rate hikes, but sterling has been the worst performing major currency in recent days.
The Bank of England was forced to deal with the funding crisis for Britain’s pension funds, with Quarantine’s ill-received mini-budget bringing in bond sales, as government borrowing costs soared. The central bank has set aside £65 billion to buy longer-dated bonds over the next 13 business days to ease pressure on pension funds and insurers.
ANZ economist Finn Robinson says:
Everything is a bit chaotic.
How long the calm and fresh optimism will last remains to be seen. For one, this re-stimulation will not reduce UK inflation, and that is bad for bonds and sterling.
British government bonds, as they are known, especially 30-year bonds, fell sharply following the bank’s action. The benchmark 10-year bond fell to 4 percent. U.S. Treasuries also rebounded, with the 10-year yield down more than 4% to 3.7472%. (Products move inversely with prices.)
Carney said on Radio 4’s Today programme:
If the bank had done nothing, we would have had more moves in government bond yields and perhaps some pension funds unable to meet short-term obligations and emerging problems.
And more than a shock, those pension funds will be transferred to the people they care about in the financial markets.
The main point is that the bank was able to do the work it did because it had that structure and the system was at a stage where it could not be put into operation.
Porsche will launch its stock market today in what is expected to be the second largest initial public offering in German history.
He priced the shares at €82.50, at the upper end of the announced range. They are trading 2.9% higher before trading on the Frankfurt Stock Exchange this morning.
Porsche is being spun off from Volkswagen, and on its most famous model, Porsche has split 911m shares. Volkswagen is the investment car of the founding Porsche and Porsche family, which owns Porsche Automobile Holding.
the agenda
-
8am BST: Spanish inflation for September (forecast: 10.1%)
-
10am BST: Eurozone consumer confidence is up last for September.
-
1pm BST: German inflation for September (forecast: 9.4%)
-
1:30pm BST: US GDP final for second quarter
