Stockwatch: Investors are wary of Truss

Sterling has sunk to its lowest level against the dollar since 1985 and multiple analysts have issued cautionary notes about the new PM

Liz Truss's victory has sparked concerns about soaring UK borrowing costs, a possible trade war with the EU and conflict with the Bank of England. Photograph: PA

Tue Sept 13 2022 - 05:30

Markets appear wary about Liz Truss, with sterling sinking to its lowest level against the dollar since 1985.

Truss supporters might argue the dollar has been strong against all currencies. Still, sterling has weakened against the euro; the yield spread between UK and German government bonds has widened; and multiple analysts have issued cautionary notes regarding Truss.

Such notes are usually concerned but polite, pointing to soaring borrowing costs as well as the possibility of a trade war with the EU and conflict with the Bank of England. Bluebay Asset Management’s Timothy Ash is more blunt. “Liz Truss as PM,” he tweeted. “God help the UK.”