Performance of shares, sterling reacts to UK new budget

Irritating recession and interest rate worries impacted Europe’s markets on Thursday, and the pound fell as the United Kingdom seeks a way out from its disastrous fiscal experiment to leave it behind it with a new budget that is largely conceived of as austere-looking.

Early optimism about Siemens’ earnings and expectations that the ECB might slow its rate hikes quickly turned into more selling in Europe with Wall Street also expected to open 1% in the red territory.

Remarks by Fed policymakers drove the dollar’s comeback by 0.7% higher after a recent 7% decline and made government debt markets nervous again.

The sterling had gone from $1.193 to $1.1798 against the US dollar in London by the time the country’s finance minister Jeremy Hunt had delivered his new budget plan of 55 billion pounds ($64.93 billion) of tax rises and spending cuts.