The Pound is having tough times. Overview for 29.09.2022
The Pound Sterling is keeping balance against the USD as much as possible. The current quote for the instrument is 1.0800.
The news released yesterday were rather puzzling. The Bank of England announced its decision to buy long-term bonds to calm markets starting 28 September, thus stopping the bond buying programme that started earlier. The programme volume is not limited – the regulator said the purchases might be any number necessary to achieve the target.
The target is to get back to normal market conditions.
The surge in profitability of the British national debt was caused by the programme to cut taxes in the country, which might add over 70 billion to the UK budget this year alone.
What does it mean? First of all, the BoE acknowledged a defeat in its fight against inflation. It happens. But now the UK is facing hyperinflation. In other words, they use gasoline to fight fire.
A as result, the new Prime Minister Liz Truss has met all concerned expectations so far – her policy is aggressive and rather questionable. She was already asked to fire Chancellor of the Exchequer, but she hasn’t made the decision yet.
In this light, the Pound found itself even in a more complicated position.
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