Mortgage holders face ‘ticking time bomb’ as interest rates rise

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The pound fell again today after a sharp rebound against the dollar on Wednesday.

The pound jumped the most since mid-June on Wednesday, dragging the euro with it, after the Bank of England carried out the first of its emergency bond buybacks, worth more than £200,000. a billion pounds sterling.

This morning, the British pound was down 0.9pc at $1.0789 mid-session in Asia, losing some of the previous day’s rally. The euro also weakened to $0.969, following Wednesday’s 1.5% rise, the biggest since early March.

The pound fell to a record low of $1.0327 on Friday as investors delivered a scathing verdict on Kwasi Kwarteng’s plan for record tax cuts funded by a massive increase in borrowing.

The euro had plunged to a new two-decade low at $0.9528.

5 things to start your day

1) Pension fund crisis forces bank to bail out £65bn Bank warned of ‘significant risk to UK financial stability’ and stepped in to buy long-term gilts

2) Yellen reassures health of global economy after IMF stoked fears of UK contagion The US Treasury Secretary insisted financial markets are “working well” as stocks in Europe and on Wall Street rebounded.

3) UK trade and travel risk ‘rapid’ decline if Brussels refuses to ease impending border controls Biometric checks are due to be introduced next May, replacing the “wet marking” of passports.

4) EDF plans to keep UK nuclear power stations open longer to boost energy supply The French public company said it would review its current plans to close Hartlepool and Heysham 1 in March 2024.

4) Russia forced to use its own aircraft technology to supply its fleets The country is trying to revive its crash-prone Cold War-era aviation industry after being hit by Western sanctions

What happened overnight

Asian stock markets rose on Thursday after the Bank of England launched an emergency bond-buying program. The move supported the pound and offered some comfort to a turbulent mood in the markets, but by mid-morning in Tokyo the pound was already struggling to find support and was down 0.6pc at 1.0818 $. MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 1.5% and is eyeing its best session in a month. The Japanese Nikkei rose 0.9pc, while the Hang Seng rose 2pc.

coming today

  • Economy: Consumer Credit (UK), Mortgage Approvals (UK), Gross Domestic Product (US), Initial Unemployment Claims (US), Consumer Confidence (EU), Indicator economic climate (EU)
  • Company : Mcbride (final results), Next, Synairgen, Novacyt (interims), Mitchells & Butlers (trade update)

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