The pound has risen to the highest level for two weeks ($1.14) following the Government’s U-turn on slashing the top rate of income tax.
Sterling is on track for its sixth daily rise in a row, continuing to recover from its record low of $1.03 last Monday (26 September).
The pound plummeted after Chancellor Kwasi Kwarteng unveiled his mini-budget on 23 September, which included a large package of tax cuts to be funded by increased Government borrowing.
Following the subsequent decrease in the value of the pound, Kwarteng abandoned the decision to slash the top rate of income tax, saying that it had become a “distraction” in what was otherwise a strong package.
The pound began to recover following this announcement, and continued to increase following reports that the Government would bring its medium-term fiscal plan forward.
However, on Tuesday (4 October) the Chancellor confirmed the plan will still take place on 23 November.
Furthermore, according to a report from the Institute of Directors (IoD), while directors had concerns surrounding high inflation and political instability in September, overall confidence in the economy remained neutral.
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