Economy

The Market Reacts Coolly To A Hint of Delay in Fiscal Plans by Investing.com


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Geoffrey Smith 

Investing.com — The pound moved higher and U.K. government bond prices were broadly stable on Wednesday in London’s early trading hours. This is despite speculations of a delay in publication of the government’s fiscal plans.

Jeremy Hunt has been appointed as the Chancellor and Exchequer by Rishi Sunak. His predecessor Liz Truss had resigned. Hunt had originally planned to publish a new budget for next year on October 31st. Sky News was informed by a fellow cabinet minister that this deadline might be pushed back a bit.

Sunak “ofcourse will want to take some times to work on that,” Foreign Secretary James Cleverly said. Cleverly also noted that Sunak had been Chancellor in Boris Johnson’s cabinet until earlier this summer.

Cleverly suggested that any delay, if any, will be minimal, saying that “We are certain it must come soon.” We know people want certainty. We know people want to understand the government’s plans.

Assets from the UK were generally optimistic about the delay, the overall feeling still being one relief that Truss’s plans are dead.

The pound was trading at 0.7% at $1.1550 at 03:35 ET (07.35 GMT) and 0.3% at 1.1538 at 0.0338 at the time of writing. The benchmark government bond yield, or Gilt, rose 2 basis points to 3.65%, after it had jumped as high as 4.63% due to the possibility of higher borrowing to pay for Truss’s plans. The 10-year Gilt yield returned to the level it was on Tuesday, the day Truss’s government published its plans.

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