Euro to pound

2022 - 9 - 23

British pound plunges, bonds sink after government announces tax ... (CNBC)

The embattled British pound fell more than 2% against the dollar, after the new U.K. government announced a radical economic plan in a bid to boost growth.

With the U.K. S&P Global said it meant the bloc was likely to enter a recession. - Friday's measures were billed by the government as heralding a new era for the U.K. Paul Johnson, director of the Institute for Fiscal Studies, said markets appeared "spooked" by the scale of the "fiscal giveaway," and said it represented the highest level of tax cuts in half a century. "The obvious implication is that BOE rates are likely to be higher for longer than they would have been otherwise. economy was likely already in a recession as it raised interest rates by 50 basis points. [British pound](https://www.cnbc.com/quotes/GBP=) fell 3.5% against the dollar Friday, after the new U.K. Yields on 2-year U.K. The U.K. Yields move inversely to prices. bonds amid a rise in expected government debt. Friday's measures were billed by the government as heralding a new era for the U.K.

Pound hits 37-year low against dollar on huge UK tax cut 'gamble' (Financial Times)

UK government bonds sold off sharply and the pound hit a new 37-year low against the dollar as investors worried that Kwasi Kwarteng's tax cuts and energy ...

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Sterling tanks 3%, set for biggest one-day fall since 2020 (Reuters)

A downturn in business activity across the euro zone deepened in September, according to a survey which showed the economy was likely entering a recession as ...

Pound Euro Rate Plunges as Mini-Budget Spooks Markets (TorFX News)

(Updated 15:00, 23/9/22) The Pound Euro (GBP/EUR) exchange rate briefly spiked as the government announced its new mini-budget, only to then plunge to a ...

(Updated 15:00, 23/9/22) The Pound Euro (GBP/EUR) exchange rate briefly spiked as the government announced its new mini-budget, only to then plunge to a 19-month low. The government argues that its new path for fiscal policy will grow the UK economy. Any negative headlines or ongoing nervousness about the referenda in Russian-occupied Ukrainian regions could weigh on EUR. However, as the government unveiled its new fiscal policy, Sterling spiked. The all-important service-sector PMI revealed a contraction in activity this month, with the score falling from 50.9 – only just in expansionary territory – to 49.2. Both the manufacturing and services reports printed marginally below expectations, and both showed deepening contractions in business activity. ‘Today, the chancellor announced the biggest package of tax cuts in 50 years without even a semblance of an effort to make the public finance numbers add up. Lower- and middle-income households will get very little from the cuts, leaving them exposed to the worsening cost-of-living crisis. The Chancellor also revealed that he expects the government’s energy bill freeze to cost £60bn over the first six months. This marks such a dramatic change in the direction of economic policy-making that some of the longer-serving cabinet ministers might be worried about getting whiplash… This is down over 1% on the day and close to its lowest levels since February 2021. Kwarteng announced £45bn in tax cuts designed to spur investment and economic growth.

British Pound Sinks as Markets React to U.K. Government Tax Cuts (The New York Times)

Stocks, bonds and the pound were jolted by policy details from the new government that entailed a huge rise in borrowing.

[already appeared anxious](https://www.nytimes.com/2022/09/16/business/uk-government-debt.html) about Britain’s fiscal state before the details of the new government’s plan were unveiled by Mr. Britain’s budget and balance of imports and exports make the country dependent on what a previous central bank governor called “the kindness of strangers” to finance economic plans. “But the growth plan will very soon show we are on the right course and we are steering us to a more prosperous future.” Kwarteng outlined the government’s plan in a statement to a packed Parliament, promising to accelerate economic growth with a combination of tax cuts and deregulation that echoed the 1980s under Prime Minister Margaret Thatcher. “Sterling is in danger,” warned analysts at Deutsche Bank, who have been fretting for weeks about investors losing confidence in Britain and being unwilling to finance its current account deficit. But the emphasis on lower taxes for companies and workers comes as the government prepares to spend £60 billion over the next six months to subsidize energy costs for The pound also fell 2 percent against the euro on Friday and dropped more than 3 percent against the U.S. This will add even more to the cost of these tax cuts and previously announced spending plans to shield households and businesses from the soaring cost of energy. “The markets react as they will,” Mr. The yield on benchmark 10-year government bonds climbed to the highest since 2011. Bond yields, a measure of borrowing costs, shot higher, which will make the interest the government pays on the new debt it issues much more expensive. The British currency has lost more than 19 percent against the dollar this year.

Pound Pares Losses Vs Dollar, Rises Vs Euro After Mini-Budget (Morningstar.com)

Smiths Group PLC said Friday that pretax profit for fiscal 2022 fell after booking higher costs, missing consensus, and that strong order books and its leading ...

"Re-introducing what is perceived as one of the more insidious elements of a culture that no-one wants to see return carries risks that incentivising the sale of financial products will always bring," Quillon Law's Michael Barnett writes. Incentivising sales staff with unlimited bonuses means they may pay less attention to issues such as internal compliance and risk policies and suitability of financial products for customers, commercial-dispute law firm Quillon Law says. government's decison to scrap caps on bankers' bonuses following the country's EU exit could re-introduce risks and practices that some believe led to the 2008 global financial crisis, a law firm says. They're also likely to increase the government deficit materially, given a lack of spending cuts, the brokerage says. Freezing the business rates multiplier will stimulate investment and will allow retailers to focus on what's important - keeping prices down for households," Dickinson says. The increase will ultimately be passed through to families in the form of higher prices, BRC Chief Executive Helen Dickinson says. 1034 GMT - The slip in the U.K. More Acquisitions PLC said Friday that it has agreed on a conditional heads of terms to acquire Megasteel Ltd. At face value, the composite PMI points to a fall in GDP of around 0.2% on quarter in 3Q, which would confirm that the U.K. --- The government will also cancel planned increases in duty rates for beer, cider, wine and spirits. Kwarteng also said the government will cut the basic rate of income tax to 19% in April 2023 and abolish the highest rate of income tax of 45%.