Immediately following the announcement of the tax cut on Friday, investors reacted very negatively. The nervousness grew even greater on Sunday after Finance Minister Kwasi Kwarteng promised further tax cuts. The pound briefly hit an all-time low against the US dollar this morning, falling to $ 1,035.
Economists have asked the Bank of England, Britain’s central bank, to intervene by raising interest rates. Tonight, the Bank of England said in a statement that it “is closely following developments in the financial markets” and “will not hesitate to raise interest rates if necessary”. That announcement doesn’t seem to be enough to calm the markets for the moment.
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