British Finance Minister Kwasi Kwarteng (left) on Monday morning confirmed that the government would be scrapping its plans to cut tax for the country’s highest earners.
Leon Neal | Getty Images News | Getty Images
The pan-European Stoxx 600 climbed 1.7% in early trade, with basic resources adding 2.7% to lead gains as all sectors and major bourses entered positive territory.
Finance Minister Kwasi Kwarteng flew home early from the International Monetary Fund in Washington on Thursday night as ministers convened to address the nation’s economic chaos.
Reports on Thursday suggested the government could scrap the £43 billion ($48.6 billion) of unfunded tax cuts included in its so-called “mini-budget” on Sep. 23, sending stocks and the pound surging.
Thursday was a wild ride for global markets, as an initial plunge following a hotter-than-expected U.S. inflation report gave way to a 1,500-point swing on Wall Street that led the Dow to close 800 points higher.
Markets in Asia-Pacific then rallied overnight as investors seemingly shook off the inflation report and instead focused on hopes for a U.K. fiscal U-turn and further stimulus from the Chinese government.
U.S. stock futures were higher in early premarket trade on Friday as investors await a slew of corporate earnings from the country’s biggest banks.
The Bank of England on Friday will end its temporary purchases of long-dated U.K. government bonds, a support mechanism launched two weeks ago to stabilize the gilt market and rescue pension funds in the wake of the government’s fiscal announcements.
