Change of Chancellor but Truss fights on

By Luke Dyson

Following on from last week’s trading, we saw a continued high level of volatility across the board for sterling-based currency pairs. This was off the back of chancellor Kwasi Kwarteng being sacked as a last minute attempt from Liz Truss to stay in power and survive the current political and market turmoil affecting the country. The tax cuts in the mini budget were not funded and so drastic borrowing would need to increase to maintain current spending. As a result of this Jeremy Hunt has now been placed as the new Chancellor to take over from Kwasi Kwarteng.

It has been stated that Liz truss has not done enough to restore any confidence in the UK investor markets / assets. So due to current market issues Liz Truss has now announced that the 2023 corporation tax hike will take place. Which is a complete about turn of her policy pledge to cancel the hike whilst running her campaign to be elected as Prime Minister. This will now raise corporation tax to 25% on profit above £50,000.

As a result of this political mess it is believed up to 100 Conservative MPs have written to Graham Brady with letters of no confidence. Even calling for a vote of no confidence which is impossible under the current rules till September 2023. Brady is back to work today and will process these letters, if the mood continues to sour he may have to advise Liz Truss to step down.

This current political situation will generate a large amount of market volatility for the weeks to come, as significant amounts of uncertainty regarding the UK’s Prime Minister being incompetent moves into the stage light. If you have an up and coming currency transfer in the weeks or months ahead consider taking advantage of the current rates as these could be very short lived depending how the situation develops this week. Please get in touch with your currency consultant today to run through what strategies would work best for your up and coming requirements.