The pound may have returned to the levels it was at when Chancellor Kwasi Kwarteng stood to address MPs a week ago but that doesn’t mean we’ve miraculously returned to a pre-mini-Budget world.
AJ Bell investment director, Russ Mould, said: The currency’s recovery is predicated on more rapid and aggressive rate hiking from the Bank of England with all the implications that has for borrowers and, in particular, anyone with a mortgage.
“There are signs of a slowdown in Nationwide’s house price data for September, but these numbers belong to a different world from the one we are in now and all participants in the housing market will be nervously watching future readings for signs of how much immediate impact is being felt on property transactions.
“Also potentially helping sterling this morning was an updated estimate of GDP which suggested modest growth in the second quarter as opposed to a modest fall and signs the new Government may be recognising we are in a crisis, despite their protestations to the contrary, as Liz Truss and Kwarteng prepare for a meeting with independent fiscal watchdog the Office for Budget Responsibility.
“Though given the OBR offered a draft forecast ahead of the mini-Budget, this does rather ring of closing the stable door after the horse has bolted.”