Posted Sep 27, 2022, 7:30 PMUpdated on Sep 27, 2022 at 7:48 PM
“Political Thought of the Recoinage Crisis of 1695”. The thesis of Kwasi Kwarteng devoted to the great English monetary overhaul will not have prevented the new Chancellor of the Exchequer from being given back the coin. His meeting with City pundits does not seem to have reassessed his mini-budget. The tax cuts and the abandonment of the European bonus ceiling should have stroked them in the direction of the hair. But the memory of the debt crisis of 1976 took over those of the “Big Bang”.
The fall of the pound and the rise in interest rates signal the awakening of the “vigils” of the bond markets. They also make economists gloss over the ” submerging markets while making hedge funds happy.
As for the solid big British banks, they must mourn an orderly rise in the cost of money, which would have benefited their interest margin. Experts fear a brake on the production of credit and a deterioration in the quality of borrowers.
More marked stall
The two retail giants, Lloyds Banking and NatWest, remain suitably valued (0.8 times equity) against diversified competitors. But their courses fell further in one week (-11% and -14%). For the Treasury of His Excellency, owner of 48.5% of the second, 2 billion pounds have thus flown away, nearly 5% of the unfunded tax cuts which had set fire to the powder.
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