Markets Wobble as Britain Gets a New Prime Minister and Energy Worries Grow

On Monday, as Ms. Truss was announced as the new prime minister in a widely expected result, the pound was little changed at about $1.15. It has been steadily sliding for over a year (since hitting $1.42 in June 2021) and is less than 1 percent away from being at its lowest level since 1985. Yields on Britain’s government debt, a measure of borrowing costs, have jumped higher, too. The yield on 10-year bonds approached 3 percent, the highest since early 2014.

The decision not to restart Russian gas flows through Nord Stream 1 has increased concerns about Europe’s energy supply for the winter and how much usage might need to be restricted to avoid blackouts.

Benchmark Dutch natural gas futures rose as much as 35 percent on Monday morning, and by early evening were 13 percent higher.

The euro was 0.3 percent weaker against the dollar on Monday, falling to 99 U.S. cents on Monday. It fell below parity for the first time in two decades in mid-July and has remained around that level. The shared currency has fallen nearly 13 percent this year against the dollar as an energy crisis brewed and the dollar strengthened with the Federal Reserve sharply raising interest rates in the United States.

Article source: https://www.nytimes.com/2022/09/05/business/britain-markets-truss.html