Pound Rises as Liz Truss Announces Resignation

Rise occurs as investors react to Prime Minister, Liz Truss’s resignation.

The UK pound rose against the US dollar and government borrowing costs dipped as investors reacted to Prime Minister Liz Truss’s resignation. Sterling jumped to $1.13 at one point before slipping back but was still higher than at the start of Thursday.

One analyst said the reaction suggested investors were “relieved” by the news, despite a lot of uncertainty remaining. Business groups as well said the new prime minister would have to act quickly to restore confidence. Government borrowing costs rose sharply last month after the government promised huge tax cuts in its mini-budget without saying how it would pay for them.

But these costs fell back after the Bank of England stepped in with an emergency support program, and after Jeremy Hunt reversed nearly all the mini-budget measures when he became chancellor.

UK Finance Minister Jeremy Hunt is due to announce plans for spending and tax on 31 October in his economic plan, which the Treasury confirmed was set to go ahead.