Closing summary
We are closing up on the business live blog, but you can follow the latest news on our main live blog with Jamie Grierson here:
The Bank of England has taken emergency action to calm turmoil in financial markets amid the collapse in the pound and the increase in government borrowing costs triggered by Kwasi Kwarteng’s mini-budget last Friday.
Threadneedle Street said it was taking urgent steps to buy long-dated UK government bonds, beginning immediately in an attempt to stabilise the market. UK pension funds have apparently come under pressure to sell bonds. The central bank’s move calmed nerves in the bond market, where yields (or interest rates) fell sharply, especially for the 30-year bond, whose yield fell to 4% from 5.5% before the announcement.
The pound tumbled as much as 1.7% before steadying somewhat, but is still 0.5% lower on the day at $1.068.
The FTSE 100 index, which had earlier fallen nearly 2% to reach 6,836, was edging higher. [Update: it later closed at 7005.39.] Other European indices are still in the red, but have pared losses, with Germany’s Dax down 0.1%, France’s CAC down 0.38% and Italy’s FTSE MiB 0.9% lower. On Wall Street, the S&P 500 has edged 0.3% higher and the Dow Jones ticked up 0.1%, while the Nasdaq is flat.
• This summary was amended on 29 September 2022, to remove an erroneous FTSE 100 figure, and to note the index’s status at close.
UK house prices are expected to drop by 10% to 15% next year, analysts and brokers predict, as mortgage providers pull deals and raise interest payments to levels not seen since before the 2008 financial crisis. A record 935 mortgage products were pulled overnight, according to Moneyfacts.
Our other main stories today:
Thank you for reading. We’ll be back tomorrow. take care! – JK
Updated
Record number of mortgages withdrawn from market
A record number of mortgages has been withdrawn from the market, as deepening turmoil in financial markets prompted more lenders to temporarily withdraw products for new customers. Some 935 products were pulled in Britain overnight, according to financial services provider Moneyfacts.
The volatility comes after the new UK government announced huge tax cuts funded by borrowing last Friday, leading to a plunge in sterling and a surge in government bond yields as concerns mounted over its ability to fund the plan.
