London financial insiders are furious with Liz Truss after the government announced it would cut taxes and increase spending, prompting market volatility. Following the announcement, sterling hit an all-time low against the dollar and the government bond and UK government bond markets were thrown into chaos, prompting intervention by the Bank of England.
Traders leaving work in Canary Wharf today have given Express.co.uk their views on politics, with some even predicting Liz Truss’ political demise by the end of the year.
An angry insider told Express.co.uk: “We don’t know what f is** Occurrence.”
Another, who works in economic research, echoed the comments. He said: “Things have changed so quickly sometimes in the past few weeks [it feels like] Days happen in years. It’s so volatile that it can be difficult to keep up.”
He added: “The talk was, will Truss be out until December and who will replace her?”
Friday’s mini-budget announcement sparked a huge sell-off in sterling that continued into this week. By the close of business on Wednesday in the UK, the GBP was trading around £1.09 per dollar higher compared to the start of the week.
Today, the Bank of England announced it would start buying long-dated UK bonds in a bid to stabilize the gilt market which, if ‘dysfunction’ persists, could pose a ‘material risk to UK financial stability’.
A London Stock Exchange official told Express.co.uk: “[It’s] a massive s*** show at the moment. [The Government] made a massive faux pas to impress people. You need to roll back part of it [the policies].”
Many pension funds are invested in the gilt market – bonds are generally considered to be a very safe investment. However, an industry insider said the BoE intervention is like trying to “plug a bath with a needle”.
He said: “Holding on to straws is a bit like trying to plug a bathtub with a needle. Right idea, but the markets have made their decision. The problem is that both sentiment and intraday traders will be working on it.
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The Bank of England is believed to be planning another rate hike ahead of its scheduled November 23 meeting.
She raised the rate by 0.5 percent to 2.25 percent last Thursday, before Chancellor Kwarteng announced the government’s mini-budget.
The move is an attempt to stem rampant inflation, which has caused consumer goods to rise nearly 10 percent in price since this time last year.
As the government pursues policies geared towards economic growth, industry insiders and ordinary Brits are keeping a close eye on the markets and the government’s next moves.