Pound falls after Liz Truss walks out of press conference after just 8 mins 21 secs

Posted on October 14, 2022Comments Off on Pound falls after Liz Truss walks out of press conference after just 8 mins 21 secs

Shortly after taking a question from ITV News political editor Robert Peston over whether she should apologise for the damage the mini budget has done to the Tory party’s reputation, she left the press conference where dozens of journalists were waiting to ask questions.

The eight minute and 21 second press conference appeared to have failed to fully convince the markets and some Tory MPs that her actions would restore economic and political stability in Britain.

Markets, which had been performing well most of the day, appeared far from persuaded by the PM’s speech and her replacing Kwasi Kwarteng with Jeremy Hunt as Chancellor.

The FTSE 100 had been up well over 100 points, but the gains were pared. By 3.15pm the FTSE was up just 30 points at 6880.

The pound also took a hit and gilt yields rose.

The pound was down 0. 4 per cent against the dollar at $1.1285 following the PM’s speech and news that the new Chancellor will be former Health Secretary Mr Hunt.

The gilt yields, which indicate the future cost of government borrowing, had been falling all day and for most of the week. The 30-year gilt yield fell 0.25 percentage points before Mr Kwarteng was sacked. After the PM stopped speaking, they had risen back to 4.51%, roughly where they were at the start of the day.

Paul Dales at Capital Economics said: “It’s unlikely that the removal of Kwasi Kwarteng as Chancellor and the new plans to cancel the cancellation of the rise in corporation tax from 19 per cent to 25 per cent from next April will be enough on their own to regain the full confidence of the financial markets.

“Indeed, after that and the U-turn on the 45p tax cut, there are still unfunded tax cuts of £25bn left over from the mini-budget (down from £45bn originally).”

At the press conference, Ms Truss sidestepped questions about her position as Prime Minister, emphasising that she took “difficult decisions” in the interests of “economic stability”.

She was asked why she gets to stay in No10 when Mr Kwarteng, with whom she designed the mini-budget in lockstep, was sacked as Chancellor.

She responded: “Well, my priority is making sure we deliver the economic stability that our country needs.

“That’s why I had to take the difficult decisions I’ve taken today.

“The mission remains the same. We do need to raise our country’s economic growth levels. We do need to deliver for people across the country. We’re committed to delivering on the energy price guarantee which people are already seeing in their bills.

“But ultimately, we also need to make sure that we have economic stability, and I have to act in the national interest as Prime Minister.”

She announced a U-turn on the decision in the mini budget not to go ahead with a previously planned rise in corporation tax from 19p to 25p next April.

However, some Tory MPs privately voiced disillusionment at the brief press conference.

One told The Sun: “I’m not sure the parliamentary party or markets will be reassured or convinced by her single automaton answer to legitimate journalistic questions.”

Veteran Tory MP Sir Roger Gale said: “Hard to understand why the Prime Minister has sacked her Chancellor – a good man – for promoting the policies upon which she was elected.

“Good, though, that in Jeremy Hunt there will be an experienced pair of hands on the financial tiller.”

Source link

Comments Off on Pound falls after Liz Truss walks out of press conference after just 8 mins 21 secs