Pound to euro

2022 - 9 - 23

euro to pound euro to pound

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Image courtesy of "CNBC"

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.

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Image courtesy of "TorFX News"

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.

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Image courtesy of "The New York Times"

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.

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Image courtesy of "iNews"

Why is the pound falling? GBP to Euro and USD exchange rates ... (iNews)

Former Bank of England policy maker Martin Weale cautioned that the new Government's economic plans will “end in tears” – with a run on the pound in an event ...

The changes are effective from today. adding this to our most recent forecast we can expect to be borrowing, getting on for £120bn in three years’ time,” he said. Paul Johnson of the Institute for Fiscal Studies (IFS) said of the chancellor’s measures: “This was the biggest tax-cutting event since 1972. For first-time buyers this is now £425,000. “With £45bn of tax cuts and a slowing economy… It’s half a century since we’ve seen tax cuts announced on this scale.”

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