Banks urge Kwarteng to take action now with November Budget ‘way too far away’

Good morning.

The pound has sunk back into the red after two major interventions last night reignited investor concerns about the UK’s tax-cutting Budget.

In an extraordinary development, the IMF urged Prime Minister Liz Truss to reverse her economic policies – pointing particularly to the decision to scrap the higher rate of income tax.

Ratings agency Moody’s also warned that the policies risked “permanently weakening the UK’s debt affordability”, in the strongest suggestion yet that the country is facing a credit rating downgrade.

The pound, which crashed to an all-time low against the dollar earlier this week, dipped back below $1.07.

5 things to start your day 

1) IMF urges Truss to reverse top rate tax cut in rare intervention Highly unusual move by world’s lender of last resort condemned by senior Tories as it adds to pressure on PM and Chancellor

2) Building societies under pressure as lending costs rocket Smaller lenders are more exposed to swings in wholesale interest rates than larger high street banks, which lend off their deposit bases.

3) Bank signals ‘significant’ response to turmoil BoE chief economist Huw Pill was speaking as long-term borrowing costs hit their highest level since 2002

4) Fears of job cuts as MailOnline and Daily Mail to merge operations It comes as the publisher attempts to forge a digital future for titles that frequently overlap and compete.

5) Christmas shopping chaos looms as Royal Mail staff plan 19 days of walkouts Union leaders have launched a significant escalation in their industrial dispute with Royal Mail, warning of severe disruption to deliveries 

What happened overnight 

Sterling dipped again this morning, falling nearly 1pc against to dollar to $1.0634.

Asia resumed its downwards trend, with Tokyo, Hong Kong and Seoul all down more than 2pc, while Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta were also off.

Coming up today

  • Economics: BRC shop price index (UK), crude oil inventories (US), pending homes sales (US), gross domestic product (US)
  • Corporate: Boohoo, Everyman Media (interims)