Markets like it better than ‘Kami-kwazi’

JEREMY Hunt avoided the markets chaos caused by his predecessor Kwasi Kwarteng as investors responded calmly to yesterday’s Autumn Statement.

Stocks, bonds and sterling barely moved, despite the Chancellor unveiling sober forecasts of soaring borrowing, rising unemployment and recession.

Avoiding a sell-off in UK Government bonds – or gilts – was a priority for Mr Hunt after they plunged in the wake of Mr Kwarteng’s mini-Budget in September.

That resulted in a scramble for cash by pension funds and prompted a £65 billion intervention by the Bank of England. Laith

Khalaf, head of investment analysis at AJ Bell, said: ‘Gilt markets have barely fluttered an eyelid in response to the Autumn Statement. Jeremy Hunt will be satisfied he hasn’t broken the unwritten but important fiscal rule, “don’t spook the markets”.’

The pound fell slightly against the dollar after Mr Hunt spoke, dipping by more than a cent at one stage but later recovering to end the day only about half a cent lower at around $1.18. Sterling is in much better shape than in the aftermath of Mr Kwarteng’s mini-Budget, when it dipped to an all-time low of less than $1.04.

Shares were also untroubled yesterday, with the FTSE 100 closing just 0.06 per cent lower and the more domestically focused FTSE 250 adding 0.05 per cent.