Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown:
‘’As Prime Minister Liz Truss took to the stage to try and shore up her support among her party and the country, the pound fell further back and government borrowing costs rose slightly.
She may have hoped that her triple promise of growth would have calmed markets further but with nothing new to offer the table, her words have not had the desired effect so far. The pound dipped below $1.14, hovering around $1.135 and 10 year gilt yields lifted a little to whisker under 4%.
Liz Truss bounded to the stage to the lyrics of M People, hoping the title would provide an aura of optimism to her speech. But the words I’m moving on up, you’re moving on out, may not strike the right note for those homeowners worrying about renewing their fixed rate mortgages, given how so many cheap deals have been pulled over the past week.
For now she’s pledged commitment to her Chancellor, and has reiterated support for the independence of the Bank of England, but there was no mention of exactly when the independent forecast of her administration’s slash and spend policies would be made public The report from the Office of Budget Responsibility was expected to be brought forward but question marks still remain over whether this will happen. The speech will do little to quell dissent over worries that public services will bear the brunt of the tax cuts plans. Ms Truss will still face an uphill struggle though to convince colleagues and voters that reductions in public spending, which will be necessary to fund tax cuts, won’t end up denting productivity over the longer term instead, especially if working families are made poorer.
The Prime Minister doubled down on her commitment not to bring in a further windfall tax on energy giants profits, despite the boss of Shell appearing to embrace that possibility with his comments yesterday. Ben van Beurden said that he thought taxes on oil and gas companies were inevitable to help the poorest in society. While the boss of Shell, the Labour opposition and green activists appear to be converging on views, Liz Truss seems to be playing to the conference hall of Conservative members rather than reading the wider arena of public opinion. ‘’
