[bjornsing]

I think the old adage “correlation is not causation” applies somewhat. It’s probably true that the market got worried about the UKs ability to service its long term debt, but Truss’ announcement came in the middle of the worst bear market in bonds for well over a decade. Also, e.g. the Swedish crown (SEK) has lost about as much against the US dollar as the pound has, completely unrelated to Truss and her announcement.

[chimprich]

Sorry, but that's nonsense. The market dropped spectacularly during the new chancellor's not-a-budget-honestly speech. You can't get a better smoking gun than that.

> but Truss’ announcement came in the middle of the worst bear market in bonds for well over a decade

Yes, and she chose to do that. It was amazingly irresponsible. The market response was entirely predictable.

[bjornsing]

I still think you attribute too much causality to Truss’ announcement. E.g. 1 GBP cost 12.25 SEK 5 days ago (before Truss’ announcement) and now costs 12.22 SEK.

(But sure, Truss’ announcement did cause a temporary slump even in the GBP/SEK exchange rate.)

[rgblambda]

Is it not the case that while the Swedish Crown is not officially pegged to the Euro in the same way that the Danish Krone is, it's value is heavily influenced by the Euro? The Euro's decline in value is down to investors moving their money to safer shores in the anticipation of energy shortages in Europe in the coming months.

[bjornsing]

Not pegged no, but strongly correlated of course. SEK has depreciated significantly against the euro too over the last few weeks.

[piva00]

Matching a change of government that's unproven. Having SD in power has no historical precedence so there's a definite lack of confidence in what the new government can achieve.

[bjornsing]

I think it has more to do with the extreme trade deficit. But sure, political quasi-stability is not a positive.