US Treasury Secretary Janet Yellen said the United States was monitoring developments in Britain after the government announced a fiscal program that pushed the pound to record lows against the dollar.
What happened: The financial turmoil of the past few days appeared to be confined to the UK and not spreading to the global economy, Yellen told reporters at the end of her visit to North Carolina financial times reported.
Also read: Larry Summers ‘glad’ IMF recognizes ‘gravity’ in UK situation: Here is his take on inflation
Yellen’s comments come like that IMF openly criticized Britain’s new economic strategy on Tuesday. The IMF reportedly said the fund is not recommending large and untargeted fiscal packages at this stage given heightened inflationary pressures in many countries, including the UK
Britain’s new Chancellor of the Exchequer last week Kwasi Kwarteng Reduced income tax and stamp duty on home purchases and also scrapped a proposed increase in corporate taxes.
No liquidity problems: Yellen explained that both the US and UK have “significant inflation problems and central banks are focused on trying to bring inflation down”. The finance minister said financial markets were “still working well”, adding that they “haven’t seen any liquidity problems in the markets”.
price action: That Invesco CurrencyShares British Pound Sterling Trust FXB has lost over 8% in one month.
