“The Chancellor’s announcement this morning is a boost for the pound’s recovery, which is largely down to the Government’s proposed medium-term fiscal outlook on reducing the debt to GDP ratio. This signals to financial markets that Government debt is on a sustainable path, leading to a more stable demand for gilts by investors.
“In conjunction with this, the central bank is reining in its emergency bond buying program and has stated its commitment to further interest rate hikes in response to rising inflation.
“This kind of tightening of monetary policy can help to maintain the pound’s value as it makes sterling assets more attractive.”
Dr Ganesh Viswanath-Natraj, Assistant Professor of Finance at Warwick Business School