Pound falls after chancellor unveils autumn statement | Business News
Jeremy Hunt’s fall statement didn’t bring much joy to the markets, with both the stock index and the pound below opening levels.
The pound had fallen about 0.5% – from $1.193 to $1.1850 – by the time the prime minister stood up in the Commons.
But after he finished, it fell to the $1,183 mark – down about 0.6% – and continued to drop to $1,180 (nearly 0.9% down) at 12:45pm.
The FTSE 100 was down 0.65% at 12:15 p.m., while the more domestic-focused FTSE 250 was down nearly 0.3% on the day, from a 0.4% drop earlier.
However, both indexes started to recoup some of their losses after Mr Hunt’s speech ended.
Shares of Shell and BP fell 0.45% and 0.65%, respectively, on news that the energy profit tax will increase from 25% to 35% from next year.
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said: ”Share prices of energy-producing companies fell rapidly when it became clear that the Treasury Department would collect more money that had fallen. into their profit basket when gas prices skyrocketed.
“A much larger share of the profits of energy giants like BP and Shell will now also be collected, with the energy profit tax increased from 25% to 35%.
“The door is even wider in the event of a surprise income tax imposition following comments by outgoing Shell boss Ben Van Beurden that the tax burden must fall on top of the energy sector to help help the poorest in society.
“That’s part of the reason why the reaction has been relatively muted on their stock prices.”
Monsoon tax will also be extended to generators and this leaves SSE down by 3.5%, wind farm operator Orsted by 2.2% and Drax by 3%.
Ms Streeter said the government had a risk that energy prices would fall, limiting what could be taxed – but she added that so far they were “very volatile and could rise again as cold weather approaches”. influx”. Europe”.
Government bonds fell, while bond yields – which had risen before Mr Hunt’s announcement – rose further.
The losses, however, were modest compared with the sharp sell-off caused by the short-term “small budget” announced by Liz Truss and Kwasi Kwarteng in September.
The benchmark 10-year yield was finally up 7 basis points to 3.21%, while the two-year yield was up 12 basis points to 3,104% after trading at around 3.07%. just before Mr. Hunt began speaking.