Sterling crisis: markets brace for more volatility with Kwarteng to meet bank bosses – business live

Giving tax cuts to the rich is not a vote winner.

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A YouGov survey for The Times has found that Labour has taken its biggest opinion lead over the Tories since the firm began polling in 2001.

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Labour are 17 percentage points ahead of the Conservatives, with 45% support, vs 28% for Liz Truss’s party.

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The largest Labour Party lead with YouGov since 2001 👇 pic.twitter.com/Q5cbBOISZK

— Karl Turner MP (@KarlTurnerMP) September 26, 2022

n”,”url”:”https://twitter.com/KarlTurnerMP/status/1574519629443399680″,”id”:”1574519629443399680″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”81def0ec-7150-445c-8c4c-58557ce40f32″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The survey revealed widespread public opposition, including among Tory supporters, to the tax-cutting measures announced by the chancellor last week.

“,”elementId”:”538d149e-caca-48de-a326-6c3fca50a8dd”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwarteng’s decision to scrap the 45% rate of tax for those earning more than £150,000 was opposed by 72% of voters, including 69% who backed the Conservatives in 2019.

“,”elementId”:”970f77c8-b98d-4f34-ad5d-1956ee9f3071″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Just 19 per cent of voters thought Kwarteng’s budget was “fair” — the worst polling figure since YouGov began to ask the question in 2010.

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Here’s the full story.

“,”elementId”:”48eadb1c-6ed0-415d-887c-eab05d52b9de”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

The Budget in numbers:

57% think it's unfair

53% say it won't boost growth

60% think it's unaffordable

43% too risky

BUT income tax cut and NI cut very popular

— Steven Swinford (@Steven_Swinford) September 26, 2022

n”,”url”:”https://twitter.com/Steven_Swinford/status/1574498187750129690″,”id”:”1574498187750129690″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”19a13be4-771d-4f7c-a530-7490fe7bb086″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

Scrapping 45p rate, removing bankers bonus cap & axing corporation tax hike overwhelmingly seen as wrong priority

Public supportive of other measures such as cutting income tax & national insurance

— Steven Swinford (@Steven_Swinford) September 26, 2022

n”,”url”:”https://twitter.com/Steven_Swinford/status/1574498425684606989″,”id”:”1574498425684606989″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”0749d907-5588-4208-aa92-dd3c9e160429″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664261083000,”blockCreatedOnDisplay”:”07.44 BST”,”blockLastUpdated”:1664261521000,”blockLastUpdatedDisplay”:”07.52 BST”,”blockFirstPublished”:1664261521000,”blockFirstPublishedDisplay”:”07.52 BST”,”blockFirstPublishedDisplayNoTimezone”:”07.52″,”title”:”Labour surges in polls as voters recoil from mini-budget”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 07.54 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”633294c78f0877eea340605a”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwasi Kwarteng faces a fraught meeting of City bosses today at the Treasury, following the horrific market reaction to his tax-cutting mini-budget.

“,”elementId”:”37979ca7-0517-4707-b64e-9c8f87ce4447″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwarteng and new City minister Andrew Griffith are due to welcome senior leaders from banks, insurance companies and asset managers today, Bloomberg reports.

“,”elementId”:”d297cb26-3f82-4df4-bfe4-6b5ceb6f2f91″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The aim of the meeting was originally to come up with some bold ideas for the government’s so-called “Big Bang 2” plans to re-energise the City.

“,”elementId”:”3e519f61-64fb-4347-9e94-d302c24026b3″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

But the slump in the pound, and the brutal selloff in gilts, mean it will be more of a crisis summit than a convivial conversation. Kwarteng will not be able to get away with dismissing the sterling crisis as mere market gyrations.

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Bloomberg explains:

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n

Bankers were meant to be wowed by measures such as the end of a cap on their bonuses and the scrapping of the 45% top tax rate, and the early reaction from industry bodies was positive on Friday.

n

But Monday’s markets meltdown, which sent the UK’s borrowing costs soaring, killed off those good vibes.

n

Kwarteng will need to demonstrate that he understands the seriousness of the dramatic drop in the pound and gilts rather than characterizing them as short-term fluctuations, several financiers said. Attendees will want answers on how he can restore investor confidence.

n

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Kwarteng heads for a difficult meeting with London’s top bankers https://t.co/Qc3WdYv7Dm via @GriffithsKath_ @harrynwilson @WilliamShaw546 pic.twitter.com/WsWnNSVPTd

— Zoe Schneeweiss (@ZSchneeweiss) September 26, 2022

n”,”url”:”https://twitter.com/ZSchneeweiss/status/1574484201059061761″,”id”:”1574484201059061761″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”fc879727-af00-4d30-babd-4cd7c72371e7″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1664260508000,”blockCreatedOnDisplay”:”07.35 BST”,”blockLastUpdated”:1664260646000,”blockLastUpdatedDisplay”:”07.37 BST”,”blockFirstPublished”:1664260646000,”blockFirstPublishedDisplay”:”07.37 BST”,”blockFirstPublishedDisplayNoTimezone”:”07.37″,”title”:”Kwarteng facing difficult meeting with London’s top bankers today”,”contributors”:[],”primaryDateLine”:”Tue 27 Sep 2022 07.54 BST”,”secondaryDateLine”:”First published on Tue 27 Sep 2022 07.35 BST”},{“id”:”63328caa8f0877eea340600e”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

Also Read Early detection achieves 90% survival in colon cancer

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Investors are bracing for another day of sterling volatility, as the crisis created by the government’s reckless mini-budget continues to grip the markets.

“,”elementId”:”d12fca49-8f83-4901-a8d8-5cb19ed88a67″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The pound is slightly higher in early trading, clinging onto the $1.08 mark, after hitting an alltime low around $1.035 yesterday morning. It’s still down 7% this month.

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Sterling is at $1.08 at the moment #GBP #USD #Dollar pic.twitter.com/uPrfbiQPf2

— Gemini Guy (@Gemini_Guy_1981) September 27, 2022

n”,”url”:”https://twitter.com/Gemini_Guy_1981/status/1574638409489973248″,”id”:”1574638409489973248″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”a8044d97-9c78-4c71-8154-4625409670eb”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

Sterling up 1% this morning! 😃

To $1.08 🙄

— Andy Bruce (@BruceReuters) September 27, 2022

n”,”url”:”https://twitter.com/BruceReuters/status/1574638733760073728″,”id”:”1574638733760073728″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”c0074e8a-6d71-47cd-b394-90df3086bfcd”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

And the pound still looks extremely vulnerable, as the Treasury and the Bank of England struggle to prevent a full-scale loss of financial market confidence.

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UK government bonds are on track for their worst month on record, going back to the 1950s, as international faith in Britain is hammered by Kwasi Kwarteng’s binge of borrowing to fund tax cuts, mainly benefiting the wealthy.

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The selloff has pushed the cost of borrowing for 10 years up to 4.1%, from 3.1% before the mini-budget.

“,”elementId”:”6abbe6d1-49ac-4ca4-8b51-2114940213a5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Jim Reid, strategist at Deutsche Bank, says:

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n

UK assets have remained at the eye of the storm as the negative reaction to the government’s mini-budget on Friday continued.

n

The country’s government bonds were completely routed for a second day.

n

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The staggering slump in gilt prices in recent days has forced several mortgage providers, including Virgin Money and Skipton Building Society, to pull deals, with economists predicting that interest rates could rise to 6% by next summer.

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That would leave many households facing massive increases in mortgage repayments, which will be impossible for some to meet.

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If mortgage rates rise to 6%—as implied by markets’ current expectations for Bank Rate—the average household refinancing a 2yr fixed rate mortgage in the first half of 2023 will see *monthly* repayments jump to £1,490, from £863. Many simply won’t be able to afford this (1/2) pic.twitter.com/hkoZCcSfjJ

— Samuel Tombs (@samueltombs) September 26, 2022

n”,”url”:”https://twitter.com/samueltombs/status/1574429056593977344″,”id”:”1574429056593977344″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”f14ab362-af32-4aca-8d3d-6e5fed8ccfbe”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Yesterday, the Bank of England resisted pressure to implement an immediate emergency rise in interest rates, which put fresh selling of the pound.

“,”elementId”:”3609fa60-54fc-4a25-ace8-312bb55a9f63″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2022/sep/26/pound-comes-under-new-pressure-after-bank-england-fails-announce-rate-hike”,”text”:”Pound comes under new pressure after Bank of England fails to raise rates”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”f070cb87-0c33-4314-92a9-d40128a8d116″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The pound’s calamitous slide to record lows has gripped global markets too, and even increased the risk of a global recession.

“,”elementId”:”41357f42-e546-4deb-a0b8-8ee7f0d28d64″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

And Labour leader Sir Keir Starmer is expected to depict Labour as the party of “sound money” and fiscal responsibility at his keynote speech to the Labour conference in Liverpool.

“,”elementId”:”aefcc24a-c209-482d-8dd0-1e7f22a0e43a”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/politics/2022/sep/26/labour-conference-starmer-party-financial-responsibility”,”text”:”‘Coming back to finish the job’: Starmer aims to reclaim centre ground”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”206b90d5-f838-40ff-96bd-112459b25a0c”},{“_type”:”model.dotcomrendering.pageElements.SubheadingBlockElement”,”html”:”

The agenda

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12.30pm BST: ECB president Christine Lagarde speaks on a panel on financial stability challenges related to digitalisation of financial services

1.30pm BST US durable goods orders for August

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Key events

Giving tax cuts to the rich is not a vote winner.

“,”elementId”:”58ca7446-da1e-4aa8-bd84-a316cdc54e27″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

A YouGov survey for The Times has found that Labour has taken its biggest opinion lead over the Tories since the firm began polling in 2001.

“,”elementId”:”17657540-1cc0-4c75-a5a1-e53b42db3193″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Labour are 17 percentage points ahead of the Conservatives, with 45% support, vs 28% for Liz Truss’s party.

“,”elementId”:”b2a4ebc2-dc21-4da4-af1f-ce6b9a0debb7″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

The largest Labour Party lead with YouGov since 2001 👇 pic.twitter.com/Q5cbBOISZK

— Karl Turner MP (@KarlTurnerMP) September 26, 2022

The survey revealed widespread public opposition, including among Tory supporters, to the tax-cutting measures announced by the chancellor last week.

“,”elementId”:”538d149e-caca-48de-a326-6c3fca50a8dd”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwarteng’s decision to scrap the 45% rate of tax for those earning more than £150,000 was opposed by 72% of voters, including 69% who backed the Conservatives in 2019.

“,”elementId”:”970f77c8-b98d-4f34-ad5d-1956ee9f3071″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Just 19 per cent of voters thought Kwarteng’s budget was “fair” — the worst polling figure since YouGov began to ask the question in 2010.

“,”elementId”:”99adc826-84c0-46ca-ad96-ab90e69eda69″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Here’s the full story.

“,”elementId”:”48eadb1c-6ed0-415d-887c-eab05d52b9de”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

The Budget in numbers:

57% think it's unfair

53% say it won't boost growth

60% think it's unaffordable

43% too risky

BUT income tax cut and NI cut very popular

— Steven Swinford (@Steven_Swinford) September 26, 2022

Scrapping 45p rate, removing bankers bonus cap & axing corporation tax hike overwhelmingly seen as wrong priority

Public supportive of other measures such as cutting income tax & national insurance

— Steven Swinford (@Steven_Swinford) September 26, 2022

Kwasi Kwarteng faces a fraught meeting of City bosses today at the Treasury, following the horrific market reaction to his tax-cutting mini-budget.

“,”elementId”:”37979ca7-0517-4707-b64e-9c8f87ce4447″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwarteng and new City minister Andrew Griffith are due to welcome senior leaders from banks, insurance companies and asset managers today, Bloomberg reports.

“,”elementId”:”d297cb26-3f82-4df4-bfe4-6b5ceb6f2f91″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The aim of the meeting was originally to come up with some bold ideas for the government’s so-called “Big Bang 2” plans to re-energise the City.

“,”elementId”:”3e519f61-64fb-4347-9e94-d302c24026b3″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

“,”elementId”:”25a71963-6fc0-4bd1-9393-1ebaf6acf4f9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Bloomberg explains:

“,”elementId”:”340bba48-7876-4677-a907-6359775f25df”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

Bankers were meant to be wowed by measures such as the end of a cap on their bonuses and the scrapping of the 45% top tax rate, and the early reaction from industry bodies was positive on Friday.

n

But Monday’s markets meltdown, which sent the UK’s borrowing costs soaring, killed off those good vibes.

n

Kwarteng will need to demonstrate that he understands the seriousness of the dramatic drop in the pound and gilts rather than characterizing them as short-term fluctuations, several financiers said. Attendees will want answers on how he can restore investor confidence.

n

“,”elementId”:”cfa386f1-0f83-4ae8-bb62-23d09015688e”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

Kwarteng heads for a difficult meeting with London’s top bankers https://t.co/Qc3WdYv7Dm via @GriffithsKath_ @harrynwilson @WilliamShaw546 pic.twitter.com/WsWnNSVPTd

— Zoe Schneeweiss (@ZSchneeweiss) September 26, 2022

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

“,”elementId”:”f6cd3108-11ee-4cf9-b291-696fa979429d”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Investors are bracing for another day of sterling volatility, as the crisis created by the government’s reckless mini-budget continues to grip the markets.

“,”elementId”:”d12fca49-8f83-4901-a8d8-5cb19ed88a67″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The pound is slightly higher in early trading, clinging onto the $1.08 mark, after hitting an alltime low around $1.035 yesterday morning. It’s still down 7% this month.

“,”elementId”:”55c59950-1c07-4c1c-9278-72c404dfc45d”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

Sterling is at $1.08 at the moment #GBP #USD #Dollar pic.twitter.com/uPrfbiQPf2

— Gemini Guy (@Gemini_Guy_1981) September 27, 2022

Sterling up 1% this morning! 😃

To $1.08 🙄

— Andy Bruce (@BruceReuters) September 27, 2022

And the pound still looks extremely vulnerable, as the Treasury and the Bank of England struggle to prevent a full-scale loss of financial market confidence.

“,”elementId”:”1079b1c1-4b3d-43ca-8c35-84dab22d8aef”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

“,”elementId”:”e8a34d59-9b32-4b0d-a6b5-0ab24f90a547″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The selloff has pushed the cost of borrowing for 10 years up to 4.1%, from 3.1% before the mini-budget.

“,”elementId”:”6abbe6d1-49ac-4ca4-8b51-2114940213a5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Jim Reid, strategist at Deutsche Bank, says:

“,”elementId”:”4e9aa74f-9166-4f02-a87d-2c3077654bb4″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

n

UK assets have remained at the eye of the storm as the negative reaction to the government’s mini-budget on Friday continued.

n

The country’s government bonds were completely routed for a second day.

n

“,”elementId”:”a5f9d216-2e33-4984-a891-3ec788d9b825″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

“,”elementId”:”597308e0-f542-4e20-af2e-1d9dce39c767″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

That would leave many households facing massive increases in mortgage repayments, which will be impossible for some to meet.

“,”elementId”:”cbde2653-d489-4db3-8f76-ad2898c5856c”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

If mortgage rates rise to 6%—as implied by markets’ current expectations for Bank Rate—the average household refinancing a 2yr fixed rate mortgage in the first half of 2023 will see *monthly* repayments jump to £1,490, from £863. Many simply won’t be able to afford this (1/2) pic.twitter.com/hkoZCcSfjJ

— Samuel Tombs (@samueltombs) September 26, 2022

Yesterday, the Bank of England resisted pressure to implement an immediate emergency rise in interest rates, which put fresh selling of the pound.

The pound’s calamitous slide to record lows has gripped global markets too, and even increased the risk of a global recession.

“,”elementId”:”41357f42-e546-4deb-a0b8-8ee7f0d28d64″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

And Labour leader Sir Keir Starmer is expected to depict Labour as the party of “sound money” and fiscal responsibility at his keynote speech to the Labour conference in Liverpool.

The agenda

“,”elementId”:”5a20504d-eca6-41a9-9455-9a5fa19cffc5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

12.30pm BST: ECB president Christine Lagarde speaks on a panel on financial stability challenges related to digitalisation of financial services

1.30pm BST US durable goods orders for August

Filters BETA

Seema Shah, chief strategist at Principal Global Investors which manages around $500bn in assets, has warned that it’s hard to know how far the pound will fall:

“Once a market starts to move with this kind of momentum, it’s hard to put a number on where it (sterling) will trough.

“But as an investor you take a long-term view. If you look at the UK as somewhere to invest over five years, for me that’s a no.”

Pound steadies as markets expect Bank of England action to prop up UK currency https://t.co/Nia1OF5r6e

— Sky News (@SkyNews) September 27, 2022

n”,”url”:”https://twitter.com/SkyNews/status/1574634652664561669″,”id”:”1574634652664561669″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”866a2086-2b74-4524-b40a-042befdec30c”}}”/>

Labour surges in polls as voters recoil from mini-budget

Giving tax cuts to the rich is not a vote winner.

A YouGov survey for The Times has found that Labour has taken its biggest opinion lead over the Tories since the firm began polling in 2001.

Labour are 17 percentage points ahead of the Conservatives, with 45% support, vs 28% for Liz Truss’s party.

The largest Labour Party lead with YouGov since 2001 👇 pic.twitter.com/Q5cbBOISZK

— Karl Turner MP (@KarlTurnerMP) September 26, 2022

The survey revealed widespread public opposition, including among Tory supporters, to the tax-cutting measures announced by the chancellor last week.

Kwarteng’s decision to scrap the 45% rate of tax for those earning more than £150,000 was opposed by 72% of voters, including 69% who backed the Conservatives in 2019.

Just 19 per cent of voters thought Kwarteng’s budget was “fair” — the worst polling figure since YouGov began to ask the question in 2010.

Here’s the full story.

The Budget in numbers:

57% think it's unfair

53% say it won't boost growth

60% think it's unaffordable

43% too risky

BUT income tax cut and NI cut very popular

— Steven Swinford (@Steven_Swinford) September 26, 2022

The Budget in numbers:

57% think it’s unfair

53% say it won’t boost growth

60% think it’s unaffordable

43% too risky

BUT income tax cut and NI cut very popular

— Steven Swinford (@Steven_Swinford) September 26, 2022

Scrapping 45p rate, removing bankers bonus cap & axing corporation tax hike overwhelmingly seen as wrong priority

Public supportive of other measures such as cutting income tax & national insurance

— Steven Swinford (@Steven_Swinford) September 26, 2022

Scrapping 45p rate, removing bankers bonus cap & axing corporation tax hike overwhelmingly seen as wrong priority

Public supportive of other measures such as cutting income tax & national insurance

— Steven Swinford (@Steven_Swinford) September 26, 2022

Kwarteng facing difficult meeting with London’s top bankers today

Kwasi Kwarteng faces a fraught meeting of City bosses today at the Treasury, following the horrific market reaction to his tax-cutting mini-budget.

Kwarteng and new City minister Andrew Griffith are due to welcome senior leaders from banks, insurance companies and asset managers today, Bloomberg reports.

The aim of the meeting was originally to come up with some bold ideas for the government’s so-called “Big Bang 2” plans to re-energise the City.

Bloomberg explains:

Bankers were meant to be wowed by measures such as the end of a cap on their bonuses and the scrapping of the 45% top tax rate, and the early reaction from industry bodies was positive on Friday.

But Monday’s markets meltdown, which sent the UK’s borrowing costs soaring, killed off those good vibes.

Kwarteng will need to demonstrate that he understands the seriousness of the dramatic drop in the pound and gilts rather than characterizing them as short-term fluctuations, several financiers said. Attendees will want answers on how he can restore investor confidence.

Kwarteng heads for a difficult meeting with London’s top bankers https://t.co/Qc3WdYv7Dm via @GriffithsKath_ @harrynwilson @WilliamShaw546 pic.twitter.com/WsWnNSVPTd

— Zoe Schneeweiss (@ZSchneeweiss) September 26, 2022

Introduction: Sterling crisis gripping markets

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

Investors are bracing for another day of sterling volatility, as the crisis created by the government’s reckless mini-budget continues to grip the markets.

The pound is slightly higher in early trading, clinging onto the $1.08 mark, after hitting an alltime low around $1.035 yesterday morning. It’s still down 7% this month.

Sterling is at $1.08 at the moment #GBP #USD #Dollar pic.twitter.com/uPrfbiQPf2

— Gemini Guy (@Gemini_Guy_1981) September 27, 2022

Sterling up 1% this morning! 😃

To $1.08 🙄

— Andy Bruce (@BruceReuters) September 27, 2022

Sterling up 1% this morning! 😃

To $1.08 🙄

— Andy Bruce (@BruceReuters) September 27, 2022

And the pound still looks extremely vulnerable, as the Treasury and the Bank of England struggle to prevent a full-scale loss of financial market confidence.

The selloff has pushed the cost of borrowing for 10 years up to 4.1%, from 3.1% before the mini-budget.

Jim Reid, strategist at Deutsche Bank, says:

UK assets have remained at the eye of the storm as the negative reaction to the government’s mini-budget on Friday continued.

The country’s government bonds were completely routed for a second day.

That would leave many households facing massive increases in mortgage repayments, which will be impossible for some to meet.

If mortgage rates rise to 6%—as implied by markets’ current expectations for Bank Rate—the average household refinancing a 2yr fixed rate mortgage in the first half of 2023 will see *monthly* repayments jump to £1,490, from £863. Many simply won’t be able to afford this (1/2) pic.twitter.com/hkoZCcSfjJ

— Samuel Tombs (@samueltombs) September 26, 2022

If mortgage rates rise to 6%—as implied by markets’ current expectations for Bank Rate—the average household refinancing a 2yr fixed rate mortgage in the first half of 2023 will see *monthly* repayments jump to £1,490, from £863. Many simply won’t be able to afford this (1/2) pic.twitter.com/hkoZCcSfjJ

— Samuel Tombs (@samueltombs) September 26, 2022

Yesterday, the Bank of England resisted pressure to implement an immediate emergency rise in interest rates, which put fresh selling of the pound.

The pound’s calamitous slide to record lows has gripped global markets too, and even increased the risk of a global recession.

And Labour leader Sir Keir Starmer is expected to depict Labour as the party of “sound money” and fiscal responsibility at his keynote speech to the Labour conference in Liverpool.

The agenda

12.30pm BST: ECB president Christine Lagarde speaks on a panel on financial stability challenges related to digitalisation of financial services
1.30pm BST US durable goods orders for August

www.theguardian.com

George Lanington

George is Digismak’s reported cum editor with 13 years of experience in Journalism

Sterling crisis: markets brace for more volatility with Kwarteng to meet bank bosses – business live | Business

The agenda

The agenda

Labour surges in polls as voters recoil from mini-budget

Kwarteng facing difficult meeting with London’s top bankers today

Introduction: Sterling crisis gripping markets

The agenda

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