Lates News

Although the tension in the UK bond market has eased recently due to the Labor Party government's "U-turn" on welfare reform policies, the British pound continues to fall. Analyst Chris Turner from ING pointed out in a report that the British government has made major concessions in the welfare bill after facing strong opposition from Labor MPs, which could mean future tax increases. The reason for the pound's weakness has shifted from concerns about "sovereign risk premiums" to a more common macroeconomic narrative: the contradiction between fiscal tightening and relatively loose monetary policy.