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Pound Falls as U.K. Debt and Tax Cut Plans Worry Investors


Much of the outward business of government in Britain is grinding to a halt during 10 days of national mourning until the state funeral for Queen Elizabeth II, when schools, doctors offices and many shops will close.But through it all, the financial markets have been grumbling with an unease about Britain’s economic outlook.High inflation and low economic growth are expected to continue, joined by vast borrowing to finance the new government’s plan to freeze energy bills while it cuts taxes. There is still uncertainty about the fiscal plans of Liz Truss, who became prime minister just two days before the queen’s death. And investors remain concerned that Britain’s trading relationship with the European Union, its largest commercial partner, may founder over differences less than two years since Brexit became law.Once again, British assets are out of favor. Bonds, equities and the pound have declined simultaneously in recent weeks — an unusual and foreboding confluence that could set the stage for escalating borrowing costs and stubborn inflation.“The prime minister has got a lot of work to do to reassure markets,” said Jane Foley, a senior currency strategist at Rabobank in London. “Markets are not convinced that her policies will improve the investment …

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