The pound has rallied on Thursday as financial markets gave a “damning” reaction to the announcement that Prime Minister Liz Truss is stepping down after just six weeks in the job. Sterling shot up to 1.13 US dollars before the speech as markets anticipated that Ms Truss would resign, before paring back gains slightly to stand 0.4 per cent higher at 1.126 US dollars after her statement.
Yields on gilts – or UK Government bonds – have also eased slightly in response to the Prime Minister’s decision. UK 30-year gilt yields, which fall as bond prices improve, fell back by 0.44% to 3.86% on Thursday.
Neil Wilson at markets.com said the pound’s “kneejerk verdict was damning”, signalling that her move has been welcomed across the City. He cautioned that sterling would remain volatile as traders digest what this means for the UK Government.
