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Instant View: British pound up on report govt may reverse tax cut plan

Instant View: British pound up on report govt may reverse tax cut plan By Reuters

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Economy 12 minutes ago (Oct 03, 2022 08:05)

© Reuters. FILE PHOTO: Pound and U.S. dollar banknotes are seen in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

LONDON (Reuters) – Britain’s pound rallied and UK stock futures rose on Monday, after a BBC report that a proposed controversial tax cut in the government’s mini-budget might be overturned.

The plans, outlined by Finance Minister Kwasi Kwarteng more than a week ago, included a proposal to scrap the country’s top rate of income tax and cancel a planned rise in corporate taxes – alongside an expensive plan to subsidise energy bills for households and businesses.

It triggered a crisis of confidence in the government, sent the pound into freefall and hammered government bond prices

COMMENTS:

JAN VON GERICH, CHIEF ANALYST, NORDEA

“From a market perspective, it is a good step in the right direction. It will take time for markets to buy the message but it should ease the pressure.”

“Questions still remain and sterling will likely remain under pressure.”

Instant View: British pound up on report govt may reverse tax cut plan

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