British Pound Nurses Deeper Losses after Another Government Minister Ousted
- Written by: James Skinner
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Image © Adobe Stock
The Pound built further on widespread losses late on Wednesday in what appeared to be a response to the departure of another government minister, which was followed by declines in UK government bond yields that were incongruous with the domestic inflation picture and global financial backdrop.
UK government bond yields were lower across the board while prices were quoted higher as Sterling nursed losses that had snowballed following reports suggesting that Home Secretary Suella Braverman had been dismissed, reports which have since been partially confirmed by Braverman herself.
My letter to the Prime Minister. pic.twitter.com/TaWO1PMOF2
— Suella Braverman MP (@SuellaBraverman) October 19, 2022
The dismissal relates to the sharing of a draft statement using a personal email account and is reportedly at the direction of the latest chancellor.
Above: GBP/USD at 15-minute intervals alongside GBP/EUR and yields of 02-year and 10-year UK government bonds.
"Downing Street sources claimed the move was at the behest of Hunt, who has taken over control of the government’s economic response following Truss’s disastrous mini-budget, but who they claimed was now “pulling the strings,” the Guardian reported on Wednesday.
The Prime Minister's statement can be viewed here.
Grant Shapps, a cabinet minister in the government of Boris Johnson who had been sent to the 'backbenches' by the Prime Minister, has been appointed as Braverman's replacement.
This all follows the sudden departure of former Chancellor Kwasi Kwarteng who was forced to resign on October 14 after the currency and bond markets fell broadly in the wake of September's fiscal statement.
Sterling had already fallen throughout the Wednesday session but declining UK government bond yields are indicative of the later afternoon losses coming in response to either the ministerial departure or the ministerial replacement.
Falling yields were incongruous with a global backdrop in which U.S. bond yields were pulling others higher and even more so after the Office for National Statistics said earlier in the session that UK inflation had returned to the double-digit percentages during September .
