Expect also a harder downturn if market credibility is to be restored, with a 2% contraction in GDP
It was all a bad dream. That, at least, is one interpretation of markets’ view of Liz Truss’s short and chaotic premiership. The pound stood at $1.15 against the dollar when she took office 44 days ago and was $1.13 soon after her resignation – down a bit, but most things are against the US currency.
Over in the gilt market, the yield on 10-year government IOUs, the usual yardstick of the country’s medium-term cost of borrowing, is a shade under 4%, which doesn’t sound so bad when inflation is 10%, the rest of the world is laughing at your governing party and a clear-the-air general election could still be two years away.
