Mini-budget: Why financial markets have been spooked by chancellor's growth plan
The yield on 10-year gilts, which was 3.495% at the close of business on Thursday evening surged to as much as 3.842% at one stage - a level not seen since April 2011.
As David Page, head of macro research at Axa Investment Management, put it:"This [mini-budget] is clearly something that suggests a significant amount of extra gilt borrowing, but at the same time, it's fiscal stimulus at a time when the Bank of England is already worried about aggregate demand being too high, and it's highly likely to force the Bank of England to raise rates even more than we thought they were going to otherwise."Having traded on Thursday evening at $1.
As Trevor Greetham, head of multi asset at Royal London Asset Management, put it:"Action to help struggling households and businesses pay their heating bills this winter was essential, but the scale of the tax cuts and spending increases in this announcement is breathtaking. Their influence was famously described by James Carville, an advisor to the then US president Bill Clinton, thus:"I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter.
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