Liz Truss resignation sparks recovery for pound, shares and government borrowing costs
There has been a positive market reaction to the resignation of Liz Truss after just 44 days in office, following the fierce backlash against her economic plan and humiliating climbdown.
News that the prime minister was to make a Downing Street statement sparked a rally for sterling versus the dollar – leaving the UK currency almost a cent up on the day at one stage at almost $1.13 before settling at $1.12 in the late afternoon.
It originally rose half a cent following confirmation she was to leave office.
Truss resignation – live updates
Shares also moved upwards initially on the FTSE 100 before closing higher than opening trading while government borrowing costs fell.
The 30-year gilt yield fell back to 3.8% – continuing its recovery since the post mini-budget highs of around 5% that sparked Bank of England intervention. As the afternoon progressed the figure rose to the 3.9% of Thursday morning.
It took a series of U-turns on the tax-cutting growth plan, demanded by new Chancellor Jeremy Hunt after the sacking of Kwasi Kwarteng, for market damage to ease.
The reaction to the departure of Ms Truss signalled a measure of relief that the architect of the Growth Plan – outlined during her campaign for the Tory leadership – was on her way out.
Nevertheless, there was also a measure of uncertainty at play for values, given the complete lack of vision on who would replace the prime minister in Number 10.
It will not be Mr Hunt, who has ruled himself out, leaving him free to continue preparations for the Halloween statement that is to set out the government’s new medium-term fiscal plan.
There will be some jitters over whether its direction is likely to change – or even be delayed to allow the new Tory leader to get their feet under the desk.
There has been no indication that the statement will be delayed as it is expected that the successor will be in place before 31 October.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said of the market moves: “Sterling is highly sensitive to economic policy uncertainty and even though the ship Britannia will still be left largely rudderless, with a successor still to be chosen, as far as investors are concerned, the future is marginally brighter without her in charge.
“Ten-year gilt yields eased further today, as speculation soared about her resignation, a sign of tacit approval from the bond vigilantes who punished the UK by deserting its government’s debt as worries raced up about fiscal responsibility.”
Business appealed for a more stable period ahead.
Please use Chrome browser for a more accessible video player
Hunt rules out leadership challenge
Tony Danker, the director-general of the CBI, said: “The politics of recent weeks have undermined the confidence of people, businesses, markets and global investors in Britain.
“That must now come to an end if we are to avoid yet more harm to households and firms.
“Stability is key. The next prime minister will need to act to restore confidence from day one.
“They will need to deliver a credible fiscal plan for the medium term as soon as possible, and a plan for the long-term growth of our economy.”
Pantheon Macroeconomics, the economic research consultancy, said in its October UK economic chartbook: “The economy is heading for a prolonged recession … the MPC [the interest rate setting Monetary Policy Committee] will hike Bank Rate further, but will relent at about 4%.”
World
Body pulled from mine after police cut off supplies to ‘smoke out’ thousands of illegal miners
A body has been recovered from a South African mine after police cut off basic supplies in an effort to force around 4,000 illegal miners to resurface.
The body has emerged from the closed gold mine in the northwest town of Stilfontein a day after South Africa’s government said it would not help the illegal miners.
Around 20 people have surfaced from the mineshaft this week as police wait nearby to arrest all those appearing from underground.
It comes a day after a cabinet minister said the government was trying to “smoke them [the miners] out”.
The move is part of the police’s “Close the Hole” operation, whereby officers cut off supplies of food, water and other basic necessities to get those who have entered illegally to come out.
Local reports suggest the supply routes were cut off at the mine around two months ago, with relatives of the miners seen in the area as the stand-off continues.
Relatives of miners and community members wait at the mine shaft. Pic: AP
A decomposed body was brought up on Thursday, with pathologists on the scene, police spokesperson Athlenda Mathe said.
It comes after South African cabinet minister Khumbudzo Ntshavheni told reporters on Wednesday that the government would not send any help to the illegal miners, known in the country as zama zamas, because they are involved in a criminal act.
“We are not sending help to criminals. We are going to smoke them out. They will come out. Criminals are not to be helped; criminals are to be prosecuted. We didn’t send them there,” Ms Ntshavheni said.
An aerial view of a mineshaft. Pic: AP
Senior police and defence officials are expected to visit the area on Friday to “reinforce the government’s commitment to bringing this operation to a safe and lawful conclusion”, according to a media advisory from the police.
In the last few weeks, over 1,000 miners have surfaced at various mines in South Africa’s North West province, where police have cut off supplies.
Many of the miners were reported to be weak, hungry and sickly after going for weeks without basic supplies.
Illegal mining remains common in South Africa’s old gold-mining areas, with miners going into closed shafts to dig for any possible remaining deposits.
Read more world news:
Argentina walks out of COP29 climate summit
How Ukraine is downing Russian drones
Video of Israeli hostage released by terror group
Relatives of miners and community members wait near the mine shaft. Pic: AP
Keep up with all the latest news from the UK and around the world by following Sky News
The illegal miners are often from neighbouring countries, and police say the illegal operations involve larger syndicates that employ the miners.
Their presence in closed mines has also created problems with nearby communities, which complain that the illegal miners commit crimes ranging from robberies to rape.
Illegal mining groups are known to be heavily armed and disputes between rival groups sometimes result in fatal confrontations.
World
Ukrainian frontline commander warns: ‘The world is scared of Russia and losing is not only our problem’
In the courtyard of a farmhouse now home to soldiers of the Ukrainian army’s 47th mechanised brigade, I’m introduced to a weary-looking unit by their commander Captain Oleksandr “Sasha” Shyrshyn.
We are about 10km from the border with Russia, and beyond it lies the Kursk region Ukraine invaded in the summer – and where this battalion is now fighting.
The 47th is a crack fighting assault unit.
They’ve been brought to this area from the fierce battles in the country’s eastern Donbas region to bolster Ukrainian forces already here.
War latest: Russia ready to carry out ‘massive attack’
The captain known by his men as ‘Genius’
In the summer, Ukraine launched an incursion into Russian territory, in Kursk
Captain Shyrshyn explains that among the many shortages the military has to deal with, the lack of infantry is becoming a critical problem.
Sasha is just 30 years old, but he is worldly-wise. He used to run an organisation helping children in the country’s east before donning his uniform and going to war.
He is famous in Ukraine and is regarded as one of the country’s top field commanders, who isn’t afraid to express his views on the war and how it’s being waged.
His nom de guerre is ‘Genius’, a nickname given to him by his men.
Captain Sasha Shyrshyn and Sky News chief correspondent Stuart Ramsay
‘Don’t worry, it’s not a minefield’
Sasha invited me to see one of the American Bradley fighting vehicles his unit uses.
We walk down a muddy lane before he says it’s best to go cross-country.
“We can go that way, don’t worry it’s not a minefield,” he jokes.
He leads us across a muddy field and into a forest where the vehicle is hidden from Russian surveillance drones that try to hunt both American vehicles and commanders.
Sasha shows me a picture of the house they had been staying in only days before – it was now completely destroyed after a missile strike.
Fortunately, neither he, nor any of his men, were there at the time.
“They target commanders,” he says with a smirk.
Keep up with all the latest news from the UK and around the world by following Sky News
‘The world is scared of Russia’
It takes me a moment or two to realise we are only a few steps away from the Bradley, dug in and well hidden beneath the trees.
The disguised American Bradley vehicle hidden in the forest
Sasha tells me the Bradley is the finest vehicle he has ever used.
A vehicle so good, he says, it’s keeping the Ukrainian army going in the face of Russia’s overwhelming numbers of soldiers.
He explains: “Almost all our work on the battlefield is cooperation infantry with the Bradley. So we use it for evacuations, for moving people from one place to another, as well as for fire-covering.
“This vehicle is very safe and has very good characteristics.”
The American Bradley fighting vehicle that Ukrainian soldiers have found vital in their efforts
Billions of dollars in military aid has been given to Ukraine by the United States, and this vehicle is one of the most valuable assets the US has provided.
Ukraine is running low on men to fight, and the weaponry it has is not enough, especially if it can’t fire long-range missiles into Russia itself – which it is currently not allowed to do.
If President-elect Donald Trump cuts the supply of military aid, the Ukrainians will lose – it’s that simple.
US President-elect Donald Trump has been clear he intends to change his nation’s policy on the war in Ukraine. Pic: Reuters
Sasha says: “We have a lack of weapons, we have a lack of artillery, we have a lack of infantry, and as the world doesn’t care about justice, and they don’t want to finish the war by our win, they are afraid of Russia.
“I’m sorry but they’re scared, they’re scared, and it’s not the right way.”
Like pretty much everyone in Ukraine, Sasha is waiting to see what the US election result will mean for his country.
He is sceptical about a deal with Russia.
“Our enemy only understands the language of power. And you cannot finish the war in 24 hours, or during the year without hard decisions, without a fight, so it’s impossible. It’s just talking without results,” he tells me.
Read more from Stuart Ramsay:
How Ukrainian units are downing Russia’s drones
Heartbreaking final moments of girl who tried to flee Gaza
Inside a brutal and deadly Mexican gang war
‘Losing will be not only our problem’
These men expect the fierce battles inside Kursk to intensify in the coming days.
Indeed, alongside the main supply route into Kursk, workers are already building new defensive positions – unfurling miles of razor wire and digging bunkers for the Ukrainian army if it finds itself in retreat.
Barbed wire rolled out in the Sumy region ahead of expected fighting
Tank traps in the Sumy region
Sasha and his men are realistic about support fatigue from the outside world but will keep fighting to the last if they have to.
“I understand this is only our problem, it’s only our issue, and we have to fight this battle, like we have to defend ourselves, it’s our responsibility,” Sasha said.
But he points out everyone should realise just how critical this moment in time is.
“If we look at it widely, we have to understand that us losing will be not only our problem, but it will be for all the world.”
Stuart Ramsay reports from northeastern Ukraine with camera operator Toby Nash, and producers Dominique Van Heerden, Azad Safarov, and Nick Davenport.
A weather warning has been issued for parts of Spain, as the country counts the cost of recent flooding.
The orange warnings are in place for parts of southwestern Spain – the area around Seville down towards Gibraltar.
Up to 8cm (3ins) of rain could fall within 12 hours, but the weekend looks much more settled in the country.
The latest warnings come just two weeks after flash flooding in Valencia and other parts of the country killed more than 200 people.
Malaga saw 14.2cm (5.6ins) of rainfall on Wednesday – Spain’s highest of the day – most of which fell in six hours.
All train services were halted in Malaga. Some flights have now resumed after the initial disruption.
Pic: Jamie Marchant
Emergency services in the province have moved 3,000 people from homes at risk of flooding close to the Guadalhorce River in the west of the city.
Jamie Marchant, 29, from Caerphilly in South Wales travelled to Malaga last Wednesday.
Keep up with all the latest news from the UK and around the world by following Sky News
He told Sky News that “debris” had been left behind by the recent rainfall in the region.
“Everyone is pitching in to clean up and some shops are opening as usual,” he added.
Orange warnings for the Valencia region in eastern Spain expired earlier on Thursday.
Read more from Sky News:
Call for dog-free areas to tackle racism
Argentina walks out of COP29 summit
The adverse weather could lead to total insured losses of more than €4bn (£3.33bn), according to credit rating agency Morningstar DBRS.
Much of the claims are expected to be covered by the Spanish government’s insurance pool, the agency said, but insurance premiums are likely to increase.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports7 months agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Environment1 year agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway