British Prime Minister Liz Truss has replaced her cabinet’s finance minister after he unveiled a plan for huge tax cuts. The markets reacted by selling the pound as they feared a huge increase in the UK’s public debt.
New Finance Minister brings new hope
The new Chancellor of the Exchequer, Jeremy Hunt, has blown the whistle on his predecessor’s tax cuts. And he promised to come up with a sensible fiscal plan that will help the British economy without putting unhealthy pressure on the public finances. And financial markets, not just in the UK, seem to be looking to the new head of the Treasury with hope. “All the indications are that Hunt will do everything he can to ensure that he doesn’t come up with spending that doesn’t have secured funding,” Patrick Armstrong, investment strategist at Plurimi Wealth, told Reuters.
Madrid Stock Exchange gained 2%
European stocks were solidly stronger during Monday’s trading. The main index of the London Stock Exchange itself firmed by more than eight tenths of a percent, but stock markets on the continent saw even bigger gains. The Madrid stock exchange gained the most, by more than two per cent, while other bourses rose around 1.5 per cent, including the pan-European Stoxx 600 index.
