FT News Briefing UK tax plan hurts investor confidence
Sep 26, 2022
The UK government's aggressive tax cuts create a storm of investor anxiety, raising concerns over market stability and potential intervention by the Bank of England. Meanwhile, protests in Iran erupt after the tragic death of a young woman, highlighting fierce public defiance against authority. In Russia, the mobilization for the Ukraine war sparks widespread protests and a mass exodus, with particularly strong unrest in remote regions, where historical injustices fuel local dissent.
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UK Tax Cuts Shock Markets
- The UK government's £45 billion tax cut plan, the largest in 50 years, triggered market turmoil.
- Government bonds sold off, and the pound sank to a near 40-year low, worrying investors.
Market Concerns Over UK Fiscal Policy
- The UK government's increased borrowing and tax cuts are causing inflationary concerns.
- Investors fear the Bank of England will raise interest rates to combat inflation, impacting bond markets.
Declining Investor Confidence in UK
- The pound's decline against both the dollar and euro suggests international investors are losing confidence in the UK economy.
- This drop raises concerns about the UK's economic management and potential further decline of the pound.