Good morning. The UK’s new chancellor is to rush forward a statement today in an effort to calm markets.
The Treasury said Jeremy Hunt would announce plans to tackle the government’s deficit, two weeks earlier than planned, before making a House of Commons statement later this afternoon.
The prices of UK government bonds jumped following the Treasury’s announcement, leading to a fall in the cost of borrowing for Prime Minister Liz Truss’s administration as it tries to restore its credibility following the surprising appointment of Hunt on Friday and the sacking of his predecessor Kwasi Kwarteng. The pound also rose against the dollar to $1.126.
But pressure mounted on Truss to resign over the weekend following her press conference on Friday which did little to settle the markets and the disastrous reaction to her government’s September 23 “mini” Budget.
The Bank of England confirmed today it was ending the bond-buying operation it had put in place following the “mini” Budget and was replacing it with a lending facility. The central bank noted it was not there “to provide a permanent backstop” to the pensions industry, which has been hit by the volatility in the UK government bond market.
This is a developing story. For updates please go to our live blog.
Thanks for reading FirstFT Americas. Here is the rest of today’s news — Gordon
Five more stories in the news
1. Jair Bolsonaro attacks Lula on corruption Brazil’s President Jair Bolsonaro went on the offensive in the first one-on-one debate with election challenger and former president Luiz Inácio Lula da Silva last night. The incumbent launched an almost six-minute monologue that played up the ties between Lula’s Workers’ party and authoritarian regimes in Nicaragua and Venezuela.
2. Blasts heard as suspected Russian drones strike Kyiv At least five explosions were heard in the centre of Kyiv earlier today, as Russia conducted renewed strikes on the Ukrainian capital with Iran-suppled kamikaze drones. The attacks hit a building and the area near the central railway station in the Shevchenkivsky district of the capital, the target of last week’s strikes.
3. China’s state banks step up dollar sales to support renminbi China’s state banks accelerated their sales of the dollar today to slow the decline of the Chinese currency against that of the US as the Chinese Communist party’s 20th congress got under way in Beijing. The renminbi has fallen almost 12 per cent against the dollar this year. Separately, China’s biggest state-run banks have increased their lending to help the slowing economy. The announcement coincided with President Xi Jinping’s keynote speech at the opening of the party congress yesterday.
4. Hurricane Ian losses forecast to hit $75bn Hurricane Ian is set to become the most significant natural disaster for the insurance sector in decades, industry figures have warned. Initial forecasts for the industry’s losses from the storm, which swept through Florida and South Carolina last month, have reached as high as $75bn. That would be the costliest natural disaster in nominal terms and only second to 2005’s Hurricane Katrina, which generated insured losses of $99bn in today’s money.
5. Disney warns France that future blockbusters could bypass cinemas Disney will release Black Panther: Wakanda Forever in French cinemas next month but has warned that its biggest movies may go straight to streaming in 2023 unless what it calls the country’s “anti-consumer” distribution rules are fundamentally reformed.
The day ahead
Company earnings Bank of America is expected to report a decline in third-quarter earnings compared with a year earlier as it sets aside reserves to cover potential losses on loans. Revenue is expected to increase, however, due to higher net interest income. Bank of New York Mellon and Charles Schwab will also report third-quarter earnings before the opening bell.
Economic data Factory activity in New York state is expected to have steadied following a steep decline in late summer. The Federal Reserve Bank of New York’s general business conditions index is expected to have ticked up to minus 1 in September from minus 1.5 in August, a sign that would reflect stabilising factory activity throughout the state.
Stocks to watch Investors will be closely watching Goldman Sachs’s shares today after reports that the Wall Street bank is finalising a major overhaul ahead of its results tomorrow. The Wall Street Journal reported that Goldman was planning to combine its flagship investment banking and trading businesses into one unit, while merging asset and wealth management into another. Fox and News Corp will also be in focus after reports emerged over the weekend that Rupert Murdoch wants to merge the two media companies. (WSJ)
Booker Prize The winner of the Booker Prize, the leading award for English language fiction, will be announced at a ceremony in London. (The Booker Prizes)
What else we’re reading
America’s green revolution comes to coal country The Black Rock wind farm, nestled in the remote mountains of outer West Virginia, is exactly the sort of project President Joe Biden hopes will proliferate as a result of the unprecedented clean energy cash injection he signed into law in August. Yet West Virginia remains coal country. “Dude, we barely even got any damn Tesla fuckin’ chargers in this state,” says one resident in the state capital Charleston. “It’s definitely — definitely — a coal state through and through.”
Democrats’ midterms hopes falter For a brief window this summer, the Democrats’ prospects in the midterm elections were looking up. But with just under a month to go before the crucial vote, there are increasing signs that Democratic momentum has stalled. “Both chambers [of Congress] are still in play . . . but the headwinds are pretty strong,” said one Democratic strategist.
The revolutionary ambitions of Iran’s Gen Z Young Iranians have surprised the country — and the world — by refusing to back down during one of the most widespread and long-lasting anti-regime demonstrations in the Islamic republic’s history. “Woman, life, freedom” has become the battle cry of young men and women in the streets.
The world needs more ‘desk-bombers’ The act of approaching someone at their desk without warning has become so offensive that a buzzword has been invented to describe it. It’s part of an increasing pattern at work: an outbreak of overweening shyness, or intolerance of interruption, that is at best self-destructive and at worst unproductive, writes Pilita Clark.
Asian schools top the rankings for executive MBAs Despite regional pandemic and political challenges, business schools in east Asia have strengthened their positions as leading global providers of executive MBAs, the 2022 FT EMBA rankings show.
Personal productivity
Productivity gurus are rising ever earlier to pack in strenuous workouts, ice baths, meditation and journaling before most of us have had our first coffee. These routines aren’t realistic for most, but they can be fun to watch, writes Emma Jacobs.
Source: Economy - ft.com
