FT News Briefing The UK tax cut and pound U-turn
Oct 4, 2022
In a surprising move, the UK government abandoned its tax cut plan, boosting the pound's value. Meanwhile, Brazil's elections are heating up, with Bolsonaro facing unexpected challenges. Credit Suisse grapples with investor fears about its financial health. On the other side of the world, China's property market is in freefall, leading to struggles for homeowners and local governments. Personal stories reveal the harsh realities of unbuilt homes and bankrupt developers, adding urgency to an unfolding financial crisis.
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UK Tax Cut Reversal
- The UK government's U-turn on the top tax rate cut led to a pound rebound.
- 10-year bond yields remain higher than pre-announcement levels.
Brazil Election Runoff
- Brazil's presidential election heads to a runoff, with Bolsonaro trailing Lula.
- Bolsonaro's performance exceeded poll predictions, raising concerns about potential post-election disputes.
Credit Suisse Concerns
- Credit Suisse faces market anxieties over restructuring costs and default rumors, impacting share prices.
- The situation highlights the disconnection between market signals (like credit default swaps) and actual bank solvency.
