Investors were not particularly fond of the UK’s mini budget, announced Friday, in which the government is planning high-cost measures, such as income tax cuts and stamp duty reductions. It also cancelled planned corporate tax increases and caps on bankers’ bonus.

Investors are wondering if the government will be able to afford this, without incurring massive debt, at a time when central banks are aggressively raising interest rates. This fear is reflected in the 50 bps increase in the UK's 5-year gilt, as well as the sterling's plunge to a level not seen since 1985.

Among stocks, GSK plc gained 2.0% after it named Julie Brown – from Burberry - as its new chief financial officer.

 

Analyst recommendations:

Pound Plunges to Record Lows as Kwarteng Signals More Tax Cuts (Bloomberg)

Kwasi Kwarteng’s tax cluster bomb risks blowing up UK credibility (Daily Telegraph)

Investors warn Kwarteng fiscal plan threatens market’s confidence in UK (Financial Times)