UK finance minister will meet with Wall Street banks after the newly unveiled mini-budget sparked panic in markets and sent the pound plummeting

Carla Mozée
Updated ·2 min read
UK Chancellor of The Exchequer Kwasi Kwarteng leaves 11 Downing Street holding the government's mini-budget on September 23, 2022 in London, England.
UK Chancellor of The Exchequer Kwasi Kwarteng leaves 11 Downing Street holding the government's mini-budget on September 23 in London.Carl Court/Getty Images
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  • The UK Chancellor of the Exchequer Kwasi Kwarteng is scheduled to meet with Wall Street execs, Wednesday.

  • Kwarteng is conducting outreach about the UK's newly announced mini-budget, Bloomberg reported.

  • The pound dropped to a record low with investors spooked by the plan that includes £45 billion in tax cuts.

The UK's top finance chief, Kwasi Kwarteng, is slated to meet with Wall Street bank representatives on Wednesday as he reaches out to discuss the government's economic growth initiatives that have rocked financial markets, Bloomberg reported Tuesday.

UK Treasury officials will discuss the newly announced growth plans with executives from Bank of America, Citigroup, JPMorgan Chase, and Morgan Stanley, the report said, citing unnamed sources familiar with the situation.

The so-called mini-budget laid out last week by Chancellor of the Exchequer Kwarteng led to the pound on Monday sinking to its lowest level since 1971 against the dollar. The plan includes proposals for £45 billion in tax cuts, sparking fears among investors that it may send inflation spiraling even higher and that government debt will balloon.

The pound hit a low of $1.0350 on Monday but has since recovered some ground, trading at $1.0671 on Tuesday.

The bank representatives were also expected to meet City Minister Andrew Griffith, who serves as the main liaison between the financial services industry and the UK government, the report said.

Bank of England Governor Andrew Bailey said Monday the central bank was monitoring repricing in financial markets but didn't announce an emergency meeting. Alongside the pound's drop, UK bond yields surged as prices dropped.

Pound sterling has dropped by about 21% during 2022 in what's been an overall strong year for the US dollar as the Federal Reserve has been aggressively raising interest rates to tame inflation.

Read the original article on Business Insider