ASX heads for sell-off as UK tax cut spooks markets

  • 📰 FinancialReview
  • ⏱ Reading Time:
  • 65 sec. here
  • 3 min. at publisher
  • 📊 Quality Score:
  • News: 29%
  • Publisher: 90%

Australia Headlines News

Australia Latest News,Australia Headlines

Futures put the S&P/ASX 200 1.25 per cent lower at Monday’s open, after rising recession odds sank Wall Street and the UK’s gamble with tax cuts shredded the British pound.

The rising risk of recession in the world’s biggest economy tipped the Dow briefly into a bear market as a fresh fiscal crisis enveloped the UK, where new Prime Minister Liz Truss’ tax cuts pushed sterling to a 37-year low against the dollar.

pledging the largest tax cuts since 1972 to rescue the UK economy from what the Bank of England last week conceded was the beginning of a recession.Advertisement The currency finished the New York session fetching US65.27¢, the lowest level since May 2020. The Australian dollar is buying 60.1 pence, the highest cross-rate since 2017, when the British government under Theresa May was at odds with Brussels over the timeline of Brexit.Oil retreated to January levels, but its outlook is complicated by the actions of Russia in its war with Ukraine.

Vladimir Putin is facing newfound resistance at home to his chaotic invasion as Russia last week began its first mobilisation since World War IIAs the outlook appears more uneven, the two-year US Treasury rate hit a 15-year high of 4.2 per cent. It is aiming to save up to $US2.7 billion to steady its business in the present financial year, including by parking aircraft and cutting back express service flights.Citi strategist Vasileios Gkionakis said the pound would drift closer to parity.

“A strong UK economy has always depended on a strong financial services sector,” he said. “We need global banks to create jobs here, invest here, and pay taxes here in London, not Paris, not Frankfurt, not New York.

Source: Financial Digest (financialdigest.net)

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

Given US markets did turn around some 300 points before close I wonder if that will ease the downward trend at all on Monday re ASX 200

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 2. in AU

Australia Latest News, Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Kwarteng accused of reckless mini-budget for the rich as pound plummetsStrategy of sweeping tax cuts gets hostile reception from markets and economic thinktanks, leaving some Tory MPs aghast
Source: GuardianAus - 🏆 1. / 98 Read more »

Why investors hate the UK PM’s biggest tax cuts in decadesThe Bank of England is tapping the brake, Liz Truss is hitting the accelerator. Nobody knows which way the economy will go, and the markets want to get off. A lesson for 'no one left behind' AlboMP & JEChalmers 240 billion in high income tax cuts or 240 billion invested in life changing services like Medicare, NDIS,Aged,hospitals,social housing,retire debt. No budget issues Jim when 240 billion blown on high income tax cuts. smh.
Source: FinancialReview - 🏆 2. / 90 Read more »

Investors flee as UK bets the lot on tax cuts, massive borrowingThe pound plummeted and bond yields went into freefall as the new British government unleashed huge tax cuts not seen since the 1970s. Meanwhile in Australia, the new Labor “government” is going to raise taxes and hold down productivity and personal spending So if the workers aren’t servicing the debts who does 😂
Source: FinancialReview - 🏆 2. / 90 Read more »

European stocks benchmark sinks into bear marketThe Stoxx 600 closed at its lowest level since December 2020, paced by a sell-off in energy and miners.
Source: FinancialReview - 🏆 2. / 90 Read more »