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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/jun/27/pound-shares-markets-brexit-crisis-osborne-lew-business-live
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| Pound and shares hit again by Brexit crisis as gilt yields tumble – business live | |
| (35 minutes later) | |
| 10.28am BST | |
| 10:28 | |
| The pound is continuing to lose ground..... | |
| Sterling now under $1.33, down 2.8%#Boristability | |
| 10.13am BST | |
| 10:13 | |
| 10.04am BST | |
| 10:04 | |
| After two hours of trading, the FTSE 100 index is down 71 points, or 1.1%, at 6067 points. | |
| Although that’s a chunky fall, it’s still higher than during the wild selloff on Friday morning. | |
| If trading ended now, it would be a one-week low. | |
| 9.58am BST | |
| 09:58 | |
| Sterling is weakening.... now down 3.5 cents, or 2.5%, at $1.3331 this morning. | |
| 9.58am BST | |
| 09:58 | |
| European banking shares are being pummelled hard by Brexit worries. | |
| The overall European banks index has shed 5.7% this morning, with Royal Bank of Scotland plunging by 15% and Barclays down 10%. | |
| Laura Foll, fund manager at Hendersons Global Investors, told Sky News that: | |
| There are a huge variety of worries, which is why we’re seeing a bit of capitulation in financials. | |
| If the economy slows, interest rates will come down, which means further pressure on bank profit margins, she explains. And if the economy enters recession, banks could start to take losses on their loans. | |
| 9.41am BST | 9.41am BST |
| 09:41 | 09:41 |
| Signs of angst in the markets... | Signs of angst in the markets... |
| *BARCLAYS HALTED IN LONDON ON VOLATILITY AFTER SHRS FALL 11.5% | *BARCLAYS HALTED IN LONDON ON VOLATILITY AFTER SHRS FALL 11.5% |
| 9.37am BST | 9.37am BST |
| 09:37 | 09:37 |
| The Osborn relief may be fading fast.... the FTSE 100 index is now down 80 points at 6060, its lowest point of the day. | The Osborn relief may be fading fast.... the FTSE 100 index is now down 80 points at 6060, its lowest point of the day. |
| 9.36am BST | 9.36am BST |
| 09:36 | 09:36 |
| UK borrowing costs hit fresh record low | UK borrowing costs hit fresh record low |
| In another historic development, the interest rate on UK 10-year bonds has fallen to just 1%, for the first time ever. | In another historic development, the interest rate on UK 10-year bonds has fallen to just 1%, for the first time ever. |
| That means that worried investors are piling into ‘safe haven’ government debt, in case the Brexit crisis worsens further. | That means that worried investors are piling into ‘safe haven’ government debt, in case the Brexit crisis worsens further. |
| [The interest rate, or yield, on government bonds fall when prices rise] | [The interest rate, or yield, on government bonds fall when prices rise] |
| Cheap borrowing costs are usually a good thing; in this case, though, it’s a sign of how anxious the financial market are. | Cheap borrowing costs are usually a good thing; in this case, though, it’s a sign of how anxious the financial market are. |
| UK 10 year gilt yield drops below 1% for the first time on record. And records go back to 18th century(!) pic.twitter.com/nCgWoH2ba2 | UK 10 year gilt yield drops below 1% for the first time on record. And records go back to 18th century(!) pic.twitter.com/nCgWoH2ba2 |
| This is SIMPLY EXTRAORDINARY as the UK 10 year yield reaches 1% as prices surge! Cheap borrowing #GBP #BoE https://t.co/IkwQeQGkih | This is SIMPLY EXTRAORDINARY as the UK 10 year yield reaches 1% as prices surge! Cheap borrowing #GBP #BoE https://t.co/IkwQeQGkih |
| 9.32am BST | 9.32am BST |
| 09:32 | 09:32 |
| My colleague Katie Allen says that the chancellor covered the right ground this morning, by insisting that the UK economy could survive the Brexit storm. | My colleague Katie Allen says that the chancellor covered the right ground this morning, by insisting that the UK economy could survive the Brexit storm. |
| However, the relief may not last for long.... | However, the relief may not last for long.... |
| In a classic British understatement, the chancellor opined: “It will not be plain sailing in the days ahead.” | In a classic British understatement, the chancellor opined: “It will not be plain sailing in the days ahead.” |
| He also rowed back on the emergency budget he had threatened in the event of a leave vote. Now Osborne is saying the Treasury response to Brexit will not come until the autumn when the fiscal watchdog, the Office for Budget Responsibility, has had a chance to assess the economy and a new prime minister is in place. | He also rowed back on the emergency budget he had threatened in the event of a leave vote. Now Osborne is saying the Treasury response to Brexit will not come until the autumn when the fiscal watchdog, the Office for Budget Responsibility, has had a chance to assess the economy and a new prime minister is in place. |
| In short, Osborne ticked a lot of boxes. So far the pound has steadied and theFTSE 100 is not down as sharply as it might have been. But the UK is facing a political crisis and an unprecedented process of untangling from the EU. The chancellor’s soothing words are unlikely to provide anything but a short-term tonic to nervous households, businesses and investors. | In short, Osborne ticked a lot of boxes. So far the pound has steadied and theFTSE 100 is not down as sharply as it might have been. But the UK is facing a political crisis and an unprecedented process of untangling from the EU. The chancellor’s soothing words are unlikely to provide anything but a short-term tonic to nervous households, businesses and investors. |
| Related: Market turmoil: Osborne said all the right things, but relief will be temporary | Related: Market turmoil: Osborne said all the right things, but relief will be temporary |
| 9.22am BST | 9.22am BST |
| 09:22 | 09:22 |
| Here’s our news story about George Osborne’s attempts to reassure the financial world today: | Here’s our news story about George Osborne’s attempts to reassure the financial world today: |
| Related: George Osborne seeks to calm markets amid Brexit turmoil | Related: George Osborne seeks to calm markets amid Brexit turmoil |
| It begins... | It begins... |
| George Osborne has sought to reassure financial markets by insisting Britain’s economy is in a strong position to adjust to life outside the European Union. | George Osborne has sought to reassure financial markets by insisting Britain’s economy is in a strong position to adjust to life outside the European Union. |
| Breaking his silence in a statement at the Treasury, the chancellor said he “did not resile” from the dire predictions made during the referendum campaign that Brexit could plunge Britain into recession and cost hundreds of thousands of jobs. | Breaking his silence in a statement at the Treasury, the chancellor said he “did not resile” from the dire predictions made during the referendum campaign that Brexit could plunge Britain into recession and cost hundreds of thousands of jobs. |
| “It is inevitable, after Thursday’s vote, that Britain’s economy is going to have to adjust to the new situation we find ourselves in,” he said. | “It is inevitable, after Thursday’s vote, that Britain’s economy is going to have to adjust to the new situation we find ourselves in,” he said. |
| But in a phrase reminiscent of Gordon Brown’s language in the early days of the 2008 crisis, he repeatedly insisted that the “fundamentals” of the British economy were strong. | But in a phrase reminiscent of Gordon Brown’s language in the early days of the 2008 crisis, he repeatedly insisted that the “fundamentals” of the British economy were strong. |
| Click here for more | Click here for more |