ECONOMY
Wed 15 Mar 2023 9:03 pm - Jerusalem Time
London seeks to calm the turbulent markets against the backdrop of the draft budget
London - (AFP) - The British government and the central bank announced new measures Monday to try to reassure investors who were apprehensive about last month's budget proposal, which included a large tax cut, amid market turmoil.
In the face of repeated appeals to economists and parliamentarians, Finance Minister Kwasi Kwarting brought the expected date for publishing budget estimates to October 31 instead of November 23.
In parallel, he will publish his medium-term fiscal plan to ensure that Britain's public finances remain on track.
For its part, the British Central Bank "Bank of England" announced new measures to ease pressures on liquidity, which were recorded after the shock caused by the announcement of a budget that includes a large tax cut.
However, it seems that investors were not reassured, as the yields on British government bonds due after 30 years, which rose to 5.14 percent after the presentation of the draft budget, reached 4.54 percent, reflecting fear of high indebtedness.
"The financial problems have not been resolved," said Ken Watert, director of European economics at S&P Global Market Intelligence, despite measures by the finance ministry and central bank.
And he stressed that the approximation of the date for publishing the estimates is "welcome", but it is likely that the budget will include a "big gap" in terms of funding, noting that the Central Bank's interventions in this context are like "putting a bandage on the wound without healing it."
On September 23, the government unveiled a series of budgetary measures that combine major aid in energy bills and tax cuts targeting the less affluent classes, but their huge cost caused turmoil in financial markets.
Share your opinion
London seeks to calm the turbulent markets against the backdrop of the draft budget