“The markets are clearly in charge now,” said Scott Service,portfolio manager and co-head of global fixed income at Loomis Sayles. “While some semblance of stability has returned following the about-face on fiscal policy,coming to agreement on the best course of action going forward to tame inflation without crushing the economy is no easy task.”
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Truss’ premiership saw gilt yields post some of their biggest moves on record and the pound sank to an all-time low after announcing the largest package of unfunded tax cuts in half a century. On Thursday,sterling rallied more than 1 per cent after she confirmed her resignation and was steady around the $US1.123 level. The currency has been on a rollercoaster ride during the short tenure of the Truss government.
For now,the markets’ favourite appears to be Rishi Sunak,who warned that the outgoing administration’s fiscal measures would push Britain’s economy to the brink of collapse.