The Bank of England is expected to decide an important policy response to finance minister Kwasi Kwarteng’s financial plan embodying tax cuts but, the central bank could wait until its next scheduled meeting in November before making such a move according to BoE Chief Economist Huw Pill.
The British pound gathered strength following these comments. As of writing, the GBP\/USD pair was trading at 1.0777, where it was up 0.9% on a daily basis.
Following new Prime Minister Liz Truss’s promise to sweep aside the economic, the pound fell and British government bond yields were soaring when tax cuts were announced.
“I do want to flag clearly at this point that in my view the combination of fiscal announcements that we’ve seen will act as a stimulus,” Pill told the Barclays-CEPR International Monetary Policy Forum in London on Tuesday.
Investors have said the British central bank should hold an emergency meeting now to deliver a big interest rate hike to prop up the value of the pound and avoid further inflation pressure.
The British pound dropped to a record low against the soaring dollar on Monday, triggering concerns of higher inflation and prompting social media users to share pessimistic memes about the world\u2019s fifth-largest economy.
The country, already reeling from the death of its longest-ruling queen and the recent ousting of Boris Johnson as prime minister, is in a severe cost-of-living crisis that King Charles III mentioned as one of his main concerns but the recovery of the UK economy is not on the horizon for the foreseeable future.<\/p>\n","protected":false},"excerpt":{"rendered":"
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