Kwarteng dismisses bank tax

Today's news headlines:

'Kwasi Kwarteng rejects calls for new "tax" on UK banks'. After announcing over £60 billion in unfunded tax cuts last month, UK Chancellor Kwasi Kwarteng has ignored calls to impose a fresh 'tax' on commercial banks that hold large cash reserves at the Bank of England overnight. The proposed policy would have seen interest payments on the reserves held by the central bank either lessened or stopped altogether. The 'tax' could have raised tens of billions of pounds for public finances; however, after meeting with senior bank executives, Kwarteng has turned his back on the plan. (Financial Times)

'Joe Biden warns of "consequences" for Saudi Arabia after oil production cuts'. After last week's announcement that the Organisation of the Petroleum Exporting Countries will cut oil production, US President Joe Biden has responded by stating that Saudi Arabia will face 'consequences' for defying Washington and going ahead with the cuts. The Saudi-led oil cartel announced that it would aim to reduce its production targets by two million barrels a day due to market conditions and global recession fears, as well as to preserve prices. The plan has been much to the dismay of the Biden administration as it prepares for next month's midterm elections in the face of soaring energy inflation. (Financial Times)


The US inflation data release this afternoon will likely have a major bearing on Dollar strength and will be watched closely by investors. The forecasts expect an 8.1% y/y increase in consumer prices for September compared with 8.3% for the previous month. Switching to the commodities market, Brent oil has found stability at the $92.50 level after a volatile week amid OPEC meetings last Wednesday.


Japanese PPI y/y: 9.7% vs 9.4% previously.
Swiss PPI m/m: 0.2% vs -0.1% previously. 
MPC Member Catherine Mann speaks: 12:00PM
US CPI Figures and Unemployment Claims: 1:30PM
IMF and G20 Meetings: All day

Interbank rates*:

GBP/USD: 1.1070
GBP/EUR: 1.1415
EUR/USD: 0.9700
USD/CAD: 1.3825


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*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.