Analysis – Markets are more concerned about Liz Truss’ fiscal policy than Georgia Meloni’s rise to power.
While financial markets were rolling their eyes at the far-right’s historic victory in Italy, it was in the United Kingdom that panic broke out on Monday. More than the unknown of “post-fascist” Georgia Maloney, new British Prime Minister Liz Truss, leader of the Conservative Party for twelve years in power, and her Chancellor of the Exchequer Kwasi Kwarteng, have worried investors.
In a sign of this pessimism, ten-year Italian bond yields rose 0.21 points to 4.54%, while British bond yields quickly settled at 4.24%, up 0.41 points on the day. Aren’t we sick of Europe we think?
The reason for the tensions: the “mini” budget presented by Kwasi Kwarteng on Friday offers an additional £45 billion in tax cuts, along with £150 billion in energy support measures for households and businesses, with an additional £70 billion in borrowing next year. …
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