The UK chancellor, Kwasi Kwarteng, is meeting world leaders at the autumn meetings of the International Monetary Fund in Washington today, marking his first international appearance amid an economic crisis gripping the UK.
It comes as ministers face increasing scrutiny over the market chaos that erupted after the government announced its £45bn package of unfunded tax cuts last month.
The IMF has said Britain’s priority should be tackling inflation rather than adding to the price problem through tax giveaways to achieve economic growth.
CMC Markets’ chief market analyst Michael Hewson said: “Following the release of UK chancellor Kwasi Kwarteng’s so-called mini-budget, the pound crashed to an all-time intraday low of $1.0379 against the dollar on 26 September. Since then, the term ‘shorting the pound’ has been in the headlines.
“The mini-budget has been described by many financial commentators and politicians as a reckless gamble — prior to the announcement the pound had been at $1.12. Hedge funds have looked to take advantage of the weakness in the currency by betting that it will fall.
One of the biggest fund managers to do this has been Odey Asset Management. Its founder, Crispin Odey, told the Financial Times a few days after the mini-budget announcement that his flagship European hedge fund had gained 145% year-to-date as a result of his short positions. The return was 193% by the end of the month.”