The pound has maintained its recent gains with the postponement of the economic plan until November 17.
Currently, the British pound is trading at $1.157, up about 0.9% on the day.
In recent days, the currency appreciated as investors celebrated the selection of Rishi Sunak as prime minister and the dollar declined.
Jane Foley, a currency strategist at Rabobank, described the economic statement’s postponement as both frustrating and understandable.
“The markets have generally shrugged this off because they realize we have a new chancellor and a new prime minister, and it’s very possible that they need a bit more time to get these figures right,” she added.
In recent weeks, anxieties regarding the economy had shook the financial markets.
As a result of former Prime Minister Liz Truss’s mini-budget, the value of the pound fell to an all-time low versus the dollar and government borrowing prices spiked dramatically last month.
Investors were alarmed when then-Chancellor Kwasi Kwarteng promised significant tax cuts without specifying how they would be paid for – something Mr. Sunak had warned against during the Tory leadership election this summer.
Investors view Mr. Sunak, a former hedge fund manager, as a safer set of hands, and he has committed to correct “mistakes” done under the leadership of Ms. Truss.
Ms. Foley stated, “There is no doubt that a relief rally is occurring, which is helping the pound.”
The new prime minister and his chancellor enjoy greater investor trust than his predecessor.
Ms. Foley added that the dollar’s decline also contributes to the pound’s strength.
The US dollar has been declining due to rumors that the Federal Reserve may decrease the rate of interest rate increases.
Jeremy Hunt, the new chancellor who reversed nearly all of Ms. Truss’ tax cuts, will retain his position in the new government.
It was revealed on Wednesday that his statement on the UK’s public finances will now be released two weeks later than originally scheduled.
The economic plan was originally scheduled for next Monday, but will now be presented on November 17 as a full autumn statement.
Mr. Hunt stated that the delay will guarantee that it is based on the “most accurate economic estimates conceivable.
Shevaun Haviland, director general of the British Chambers of Commerce, said on Monday that the nation “cannot afford to witness further policy flip-flopping.”
She stated, “The political and economic uncertainty of the past few months has been extremely detrimental to British company confidence and must immediately end.”
