UK Chancellor Kwarteng: BoE will be to blame if UK markets slide next week

Ross J Burland FXStreet

No more than a day after the UK's Chancellor of the Exchequer Kwasi Kwarteng had praised the Bank of England’s response to recent market turmoil, saying he is working closely with Governor Andrew Bailey and they speak regularly, he has reportedly said the Old Lady will be to blame if UK markets slide next week.

Bloomberg is with the story in Asia today.

The Bank of England's governor, Andrew Baily on Wednesday warned the Bank of England would not extend its emergency intervention in financial markets beyond this week, after the turmoil sparked by the government’s mini-budget. This weighed heavily on sterling on Wednesday which dropped below 1.1000 vs. the greenback after the Bank’s governor insisted the £65bn scheme to purchase UK government bonds would not be continued beyond the deadline on Friday.

Meanwhile, official data showed Britain's economy unexpectedly shrank by 0.3% in August, hit by weakness in manufacturing and maintenance work in the North Sea oil and gas fields. Still, the markets do not expect weaker-than-forecast growth to deter the BoE from continuing to raise rates. Money markets are fully pricing in a full-point rate rise from the Bank of England at its November meeting, according to Refinitiv data.

GBP/USD technical analysis

GBP/USD is trying to move higher in a recovery attempt in the 1.11s with eyes on 1.1180 for the sessions ahead.

GBP/USD Price Analysis: Bulls eye a break to 1.1150 and 1.1180 thereafter

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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