London, Monday, 17 October 2022
In response to Chancellor Jeremy Hunt's announcement that he was withdrawing nearly all tax proposals proposed in the mini-budget that have not started parliamentary legislation, the yield on Britain's 10-year Gilt fell further on Monday, falling by 40 basis points to 3.94%.
Hunt abandoned plans to reduce the basic income tax rate from 20% to 19% starting in April of the following year, among other things. The National Insurance and stamp duty cuts, however, will go into effect as scheduled.
The UK 30-year gilt fell by more than 40 bps to 4.35%, on track to have its second-largest daily decline ever, and the 20-year fell by a comparable amount to 4.43%.
Since the government proposed 45 billion pounds in tax cuts and unprecedented support for energy bills last month without specifying how they would be paid for, UK Gilts have been subject to extremely high volatility.
Friday saw the announcement by Prime Minister Truss of the £18 billion reversal on company tax as well as the dismissal of Kwasi Kwarteng as chancellor.
(Report by: The Decision Maker – Finance editors)
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