FT News Briefing The UK’s gilt trip continues
Oct 12, 2022
Volodymyr Zelenskyy urges G7 nations to expedite air defense supplies amid ongoing missile threats from Russia. Meanwhile, major U.S. banks brace for a tough outlook, expected to reserve over $4 billion for potential loan losses. The UK grapples with economic challenges and worries surrounding its bond market, as the Bank of England weighs financial stability against inflation control. Additionally, a NASA mission successfully alters an asteroid's course, showcasing cutting-edge advances in planetary defense.
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Bank of England Intervention Challenges
- The Bank of England's intervention to stabilize the gilt market is facing challenges as investors remain jittery.
- The deadline on the intervention is causing concern, potentially triggering further fire sales.
Extending Bond Purchases
- Extending the Bank of England's bond-buying program could contradict their monetary policy stance of tightening to combat inflation.
- It risks further weakening the British pound.
Pressure on UK Government
- The UK government's mini-budget and proposed tax cuts are under scrutiny due to market volatility.
- Doubts remain about the government's ability to implement these cuts while maintaining a stable fiscal path.