Pound edges higher in early trading after Truss’s corporation tax backflip

BBritain will be plunged into a deeper recession by Liz Truss’ corporate tax reversal and the turmoil in the mini-budget market, economists have warned as the city braced for more wild swings in sterling and bonds.

Forecasters have warned that the UK economy’s downturn will continue well into next year as new Chancellor Jeremy Hunt pledged to restore investor confidence by scuttling Ms Truss’ radical economic plans.

Goldman Sachs lowered its UK growth forecasts due to “significantly” worsening credit conditions and Ms Truss on Friday scrapped plans to scrap the corporation tax hike from 19% to 25% next April.

5 things to start the day off right

1) Jeremy Hunt’s Herculean Treasury talks about plugging a £62bn black debt hole: The new chancellor goes to work as economists predict growth could “change the picture for the better”.

2) Ticket office staff will be moved to the platforms when the kiosks are closed: Closing ticket offices would save taxpayers around £500m a year, industry sources claim

3) City hiring falls by a third as banks brace for downturn: Economic turbulence spells the end of a dealmaking boom

4) The Unbridled Dollar Blows a Hole in Liz Truss’s Defense Plans: PM pledged to spend 3 percent of GDP on the military, but the economy is now in tatters

5) Labor is the only party with a plausible growth plan, says Tesco boss: John Allan’s comments signal that relations between the Tories and big business are at a standstill

what happened overnight

Asian stock markets tumbled on Monday after another smack at Wall Street as investors brace for another sharp tightening in global financial conditions with all the recession risks that will come with it.

Financial stability concerns added to the corrosive mix, with all eyes on UK bonds after the Bank of England’s (BoE) emergency spending spree is over.

Sterling was down 0.6 percent at $1.1233 but trading was light with little liquidity in Asia. FTSE futures fell 0.5 percent and EUROSTOXX 50 futures fell 0.6 percent.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan slipped 1.2 percent, back towards last week’s 2-1/2 year low.

Japan’s Nikkei lost 1.5 percent and South Korea 0.1 percent. Chinese blue chips fell 0.6 percent ahead of GDP data due Tuesday.

https://www.telegraph.co.uk/business/2022/10/17/markets-live-latest-news-pound-euro-ftse-100/ Pound edges higher in early trading after Truss’s corporation tax backflip

Russell Falcon

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