Daily Stock Market News

UK warned ‘utterly irresponsible’ policy could drive pound below dollar and euro parity –


Virgin Atlantic’s chief executive has called on the UK government to “consider reversing” some of the policies announced last week, to prop up the pound.

“,”elementId”:”0ded3e11-2ba8-4ded-8408-6d0847a4e242″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Shai Weiss told a press conference in London that sterling’s fall in value is hurting the economy and hurting consumers, and fuelling the UK’s inflation cycle.

“,”elementId”:”044f2709-dda0-4b01-85cb-e94481e526d6″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Weiss said that Virgin Atlantic had taken some “very smart financial positions” to ease the impact of the weak pound on its business [which suggests they’re hedged against a fall in sterling]

“,”elementId”:”b8ccaf69-79a3-45ae-afd6-a49e379bd764″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

But the company is concerned about the economic environment. And Weiss suggested that Liz Truss should take a “difficult decision” to reverse sterling’s slide, arguing:

“,”elementId”:”248a7b03-fb2b-476a-8b8b-7751d13218a4″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

“Sometimes all of us in this room should be humble enough to say: ‘If I did something that is not working, maybe I should reverse course.’

n

“That is not a bad thing to do.”

n

“,”elementId”:”268f1207-ba5a-47d7-8223-22aefc557c5d”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

That would mean dropping some of the tax-cutting measure in the mini-budget that will drive up borrowing, fuel inflation, and worsen Britain’s current account deficit.

“,”elementId”:”699552bc-4f1a-4f76-a723-78b5a4d2ebcc”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Wess said Truss should take steps to protect the country from the loss of confidence in international markets, which risks driving up interest rates, and hurting the economy.

“,”elementId”:”25333cbd-9df9-4e1d-b3bb-c08cdc4669be”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

“The message to Government is pretty clear in my mind. Prime Minister Liz Truss has taken difficult decisions upon entering into the role

n

“Maybe you need to take a more difficult decision to reverse the declining pound and ensure that this country is not left with unsustainable perceived weakness in international markets, which of course then impact interest rates, impact consumers, impact mortgage rates, impact the entire economy.

n

“,”elementId”:”f1236553-8dd5-4054-b020-bcf29b8de5b5″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/FT/status/1574705469050044416″,”id”:”1574705469050044416″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”bf12316d-9b95-4e98-aa48-0d2b209659fa”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664274415000,”blockCreatedOnDisplay”:”11.26 BST”,”blockLastUpdated”:1664277058000,”blockLastUpdatedDisplay”:”12.10 BST”,”blockFirstPublished”:1664277059000,”blockFirstPublishedDisplay”:”12.10 BST”,”blockFirstPublishedDisplayNoTimezone”:”12.10″,”title”:”Virgin Atlantic chief urges UK government to reverse course to lift pound”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.18 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”6332d0348f08b1aa1d8d344b”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Nearly 300 mortgage deals have been pulled in the last 24 hours by banks and building societies after the fall in the pound fuelled forecasts of a jump in interest rates.

“,”elementId”:”4d60d333-1b74-437d-a791-5bd5ff552e36″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The Bank of Ireland, Clydesdale Bank, Post Office Money and a slew of building societies including Monmouthshire, Furness and Darlington are among the names to have withdrawn products, our consumer affairs correspondent Zoe Wood writes.

“,”elementId”:”887f4914-e17e-496c-990f-2520ee53733b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

In a statement Bank Of Ireland said that:

“,”elementId”:”b4e58043-cfd2-47cb-8bc7-1b109d6e3981″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

“due to changes in the financial market, we don’t currently have any new rates available for new or existing customers. We’ll launch a new range of mortgage rates as soon as possible”.

n

“,”elementId”:”0e26d65f-b2e9-41b9-be42-cd6d948d8203″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

There are now 3596 residential mortgage deals available, down from 3880 at the start of this week, according to data firm Moneyfacts. At the end of last year would be borrowers would have had 5315 products to choose from.

“,”elementId”:”1be22fc7-1350-4bb9-9804-1248cc89264c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Rachel Springall, finance expert at Moneyfacts, said the market was extremely volatile at the moment so borrowers need to seek independent advice to assess what their best options are right now:

“,”elementId”:”e1c635fb-f447-4f0c-a53f-5c775a94ef13″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

“The upheaval in the mortgage market may cause frustration amongst both borrowers and brokers as they see deals disappear overnight.”

n

“,”elementId”:”d529b877-2079-4842-9b1d-8e522adbcd8d”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The overnight reduction in deals – the equivalent of about 7% – comes as lenders struggle to accurately price their products after last week’s mini budget sent the pound and government bonds plunging.

“,”elementId”:”4d5c8e0d-e4c6-42e1-baab-1dbe89d9f52c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Virgin Money and Skipton Building Society were among the lenders who pulled their range of mortgage deals on Monday, while Halifax is withdrawing its fee-paying mortgage products

“,”elementId”:”843c3805-631a-42ab-812f-fdfcd3b553c1″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/money/2022/sep/26/uk-lenders-temporarily-pull-new-mortgage-deals-amid-volatile-market”,”text”:”Two UK lenders temporarily pull new mortgage deals amid volatile market”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”9816a99d-b58e-4163-bcc6-7febfe7142dc”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664274484000,”blockCreatedOnDisplay”:”11.28 BST”,”blockLastUpdated”:1664274704000,”blockLastUpdatedDisplay”:”11.31 BST”,”blockFirstPublished”:1664274666000,”blockFirstPublishedDisplay”:”11.31 BST”,”blockFirstPublishedDisplayNoTimezone”:”11.31″,”title”:”Hundreds of mortgage deals vanished in market turmoil”,”contributors”:[{“name”:”Zoe Wood”,”imageUrl”:”https://i.guim.co.uk/img/uploads/2022/07/28/Zoe_Wood.jpg?width=300&quality=85&auto=format&fit=max&s=2a4b058c6316dfaa54b30093b7c770ca”,”largeImageUrl”:”https://i.guim.co.uk/img/uploads/2022/07/28/Zoe_Wood.png?width=300&quality=85&auto=format&fit=max&s=afaf9d5dd7175653f33915da24f1f5e4″}],”primaryDateLine”:”Tue 27 Sep 2022 12.18 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”6332c46b8f082a67c7d9fa63″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The German government is concerned that Britain is conducting a ‘major’ experiment, by cutting taxes and boosting borrowing just as the central bank is raising interest rates.

“,”elementId”:”cbc79364-ae53-49ea-9fb8-de878a0e0114″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

German finance minister Christian Lindner raised doubts about the British government’s plans to accelerate spending while the central bank tightens policy to rein inflation.

“,”elementId”:”23b0a8a8-d977-4d49-9c90-b794ac36d117″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

In another sign of rising international concern, Lindner warned:

“,”elementId”:”4a6973d2-64cd-4751-8eba-28ec20096a17″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

“In the UK, a major experiment is starting as the state simultaneously puts its foot on the gas while the central bank steps on the brakes,”

n

“,”elementId”:”b496f60a-af4a-4a3f-961f-2f615b1ccdfa”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Speaking last night, at an event hosted by the Frankfurter Allgemeine Zeitung newspaper, Lindner suggested that it wouldn’t end well….

“,”elementId”:”3a640252-f997-42b4-87d2-72fdfc659103″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

“I would say we wait for the results of this attempt and then draw the lessons.”

n

“,”elementId”:”eb947fde-e53e-432c-8c73-a6e688051b3d”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/patrickwintour/status/1574692614988767234?s=20&t=h8dwqAL-KcQCUsDQX0AK9Q”,”id”:”1574692614988767234″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”bdb41566-f2aa-4639-9000-631cf0d7767a”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664271467000,”blockCreatedOnDisplay”:”10.37 BST”,”blockLastUpdated”:1664272134000,”blockLastUpdatedDisplay”:”10.48 BST”,”blockFirstPublished”:1664272134000,”blockFirstPublishedDisplay”:”10.48 BST”,”blockFirstPublishedDisplayNoTimezone”:”10.48″,”title”:”Germany worried about UK’s ‘major experiment'”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.18 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”63329dc98f0877eea340609f”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Larry Summers, a former US Treasury secretary, has warned that the UK government’s ‘utterly irresponsible’ plans could drag the pound below parity against the euro, as well as the dollar.

“,”elementId”:”7d167214-2cb9-4723-a9b4-df70d3ce0b3e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Summers has heavily criticised chancellor Kwasi Kwarteng for undermining credibility by saying ‘incredible things’ about planning more tax cuts — those weekend comments pushed the pound to a record low of $1.0327 on Monday.

“,”elementId”:”f32e6b9a-179b-4086-bfb8-fe8fe5945d17″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Summers says he was “very pessimistic about the consequences of utterly irresponsible UK policy on Friday,” but didn’t expect the markets to get so bad so quickly.

“,”elementId”:”16dc7de6-be7d-4989-8a27-5f8324f5be78″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Summers also suggests the Bank of England should have taken more decisive action, rather than its ‘timid’ statement yesterday.

“,”elementId”:”bb5b8a0f-1915-4829-b073-3f52ca6f9851″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Summers says:

“,”elementId”:”89e35221-42f2-46a9-9196-ef08eb2fec1f”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

The first step in regaining credibility is not saying incredible things. I was surprised when the new chancellor spoke over the weekend of the need for even more tax cuts.

n

I cannot see how the BOE, knowing the government’s plans, decided to move so timidly.

n

“,”elementId”:”99b3e995-956a-4321-a545-fb2f02bc1922″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Summers pointed to surging interest rates of long-dated British debt as a “hallmark of situations where credibility has been lost”.

“,”elementId”:”4f7636a1-f518-482d-9bb6-0b4fde64a62d”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

“This happens most frequently in developing countries but happened with early Mitterrand before a U-turn, in the late Carter Administration before Volcker and with Lafontaine in Germany.”

n

“,”elementId”:”a612eb7a-8af5-44db-9273-77135e7778be”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Summers warns that there could be global consequences from a currency crisis in the pound, as it is a reserve currency.

“,”elementId”:”f3949a4c-a770-41e3-a083-340e760d4117″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

The magnitude of Britain’s trade current account deficit underscores the seriousness of its challenges. My guess is that pound will find its way below parity with both the dollar and euro.

n

“,”elementId”:”a806b8d8-9a6c-4dfe-aa54-64b12cc67c0f”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Currently the pound is trading at €1.12, having hit €1.08 in yesterday’s crash, the weakest since the end of 2020.

“,”elementId”:”d6813708-6ac9-4fda-98cd-7494f30a73f6″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Here’s the full thread.

“,”elementId”:”8ecb1a26-ec39-4a53-881e-b7f70e98f729″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586690869641216″,”id”:”1574586690869641216″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”b6fffa4f-a663-49a9-81e4-b45bb4c02f88″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586692383961088″,”id”:”1574586692383961088″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”3cdbf33d-2d99-4cf4-b168-be6431bafa00″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586693789024256″,”id”:”1574586693789024256″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”05d7adf3-0564-4862-920b-0a720a724f76″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586695462199297″,”id”:”1574586695462199297″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”763f2660-ecda-4270-ba6d-70389e5bf3e5″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586697224167425″,”id”:”1574586697224167425″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”def7e6ca-5ee1-4cc0-b607-2bcc1765f84a”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586698775805965″,”id”:”1574586698775805965″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”dcab5dc7-1298-422b-9826-df033d32f43a”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586700197928960″,”id”:”1574586700197928960″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”8dd7e84a-ed62-494a-a92d-93cb1f6373ea”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586701934383104″,”id”:”1574586701934383104″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”681d80ea-a968-4d4a-a807-2a269223e11a”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586703645274113″,”id”:”1574586703645274113″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”5403f099-d3c8-4c69-9e6b-49b9f6ca4472″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

n”,”url”:”https://twitter.com/LHSummers/status/1574586705218256901″,”id”:”1574586705218256901″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”1cfca733-3ef8-480c-bb32-d122dcf40a83″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664261577000,”blockCreatedOnDisplay”:”07.52 BST”,”blockLastUpdated”:1664270829000,”blockLastUpdatedDisplay”:”10.27 BST”,”blockFirstPublished”:1664270458000,”blockFirstPublishedDisplay”:”10.20 BST”,”blockFirstPublishedDisplayNoTimezone”:”10.20″,”title”:”Summers: crisis could drive pound below euro and dollar parity”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 12.18 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”6332b8578f08d07ba0ad6d2f”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwasi Kwarteng is meeting with Britain’s top bankers and other senior City figures on Tuesday, in planned talks that are likely to turn into a crisis meeting after the sell-off of the pound and government bond market…



Read More: UK warned ‘utterly irresponsible’ policy could drive pound below dollar and euro parity –

You might also like
A note to our visitors

This website has updated its privacy policy in compliance with changes to European Union data protection law, for all members globally. We’ve also updated our Privacy Policy to give you more information about your rights and responsibilities with respect to your privacy and personal information. Please read this to review the updates about which cookies we use and what information we collect on our site. By continuing to use this site, you are agreeing to our updated privacy policy.