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- Financial Times
Global stocks fall for second straight week as central banks raise rates
Global stocks have sold off for a second straight week, weighed down by concerns over higher interest rates and the health of the economy, while oil prices declined to levels last traded before Russia’s invasion of Ukraine. The FTSE All-World index of global stocks fell 2.1 per cent on Friday, bringing its loss over the week to 5 per cent, the worst since June. Wall Street’s benchmark S&P 500 stock index finished the week down 4.6 per cent, while the tech-dominated Nasdaq Composite shed 4.16 per cent. Europe’s Stoxx 600 registered a daily loss of 2.3 per cent on Friday to officially enter “bear market” territory — typically defined as having declined 20 per cent or more from a recent peak.
- Reuters
Analysis-UK bonds and pound at centre of storm as tax shock hammers confidence
Britain's bond market suffered its biggest daily fall in decades on Friday and is expected to slump further, as investors choked on the prospect of hundreds of billions of pounds in extra borrowing to fund tax cuts and energy bills. Finance minister Kwasi Kwarteng's plans will require an extra 72 billion pounds ($79 billion) of government borrowing over the next six months alone, and - a particular concern for investors - cement permanent tax cuts costing 45 billion pounds a year. The market response was brutal, not just among bond investors but for sterling too, which sank to a fresh 37-year low against the U.S. dollar below $1.09, down more than 3% on the day.
- Financial Times
Markets uneasy over new Truss-Kwarteng era
Financial markets assess the health of a nation’s economy, and its political stability, in two ways. The fledgling Truss-Kwarteng administration is off to a shaky start, at least as far as the government bond and currency markets are concerned. Buyers of UK government bonds express their level of satisfaction, or concern, through the yield demanded on government debt.
