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London
CNN Business
–
The death of Queen Elizabeth has reached a terrible level time for the United Kingdom. With ever-increasing inflation, a depreciating currency and a decades-long cost-of-living crisis, the country has lost one of its few signs of continuity and stability.
Prime Minister Liz Truss’s government, which announced a big gamble to save the economy on Thursday just two days into office and hours before the Queen’s death, has declared national mourning until Reigns Day. Funeral ceremony.
Some shops and sports venues were closed as a courtesy, but business continued as usual for most parts of the country.
London’s financial markets opened higher on Friday, with shares rising in line with other markets in Europe and Asia. The London stock market is expected to continue trading during the period of mourning. It will be closed only for the funeral, the date has not yet been announced but it may be a public holiday.
Selfridges, one of the world’s oldest department stores, has closed outlets in London, Manchester and Birmingham, but said it would reopen on Saturday.
Meanwhile, unions have offered some respite from recent industrial action. The Communications Workers’ Union called off a strike involving 115,000 Royal Mail postal workers planned for Friday. Transport unions have canceled organized rail strikes for next week and later this month.
And while the British Academy of Film and Television Arts canceled its annual pre-Emmy event scheduled for this weekend, theaters in London’s West End remained open.
Holger Schmieding, chief economist at Bernberg Private Bank, told CNN Business that he expected the economic impact of the Queen’s death to be “small”.
“The temporary suspension of the difficult rail strikes should partially offset the impact of the days of mourning. Additional tourist revenue will contribute to that, he said.
News of the royal death came just hours after Truss announced plans to cap Britons’ energy bills from October, giving relief to millions of families and thousands of businesses to cope with rising prices.
But the rescue package could cost up to £150 billion ($172 billion), Bernberg analysts said, and would be backed by government loans. Finance Minister Kwasi Kwarteng is due to confirm the cost of the scheme later this month.
However, much of the government’s attention may now turn to the events of the next few days as preparations are made for the Queen’s funeral and the coronation of her successor, King Charles. Normal business in Parliament was suspended for the next few days.
“The next emergency budget could be delayed,” Danny Hewson, an analyst at investment firm AJ Bell, told CNN Business.
The Bank of England’s response to a sharp increase in government borrowing is also critical. Investors are already worried about the UK government’s financial situation, and the Bank is scheduled to meet on Thursday, where it is expected to raise interest rates again.
But on Friday the Bank of England announced it would extend its interest rate decision by a week “in light of the period of national mourning”. It now meets on September 22nd.
The UK Treasury did not immediately respond to CNN Business for comment. A Truss official spokesperson told reporters that despite the mourning period, the energy price cap will be implemented as planned on October 1.
The pound rebounded from 37-year lows earlier in the week and rose to $1.16 on Friday, but its long-term decline since the global financial crisis is likely to continue “until there is a seismic shift in direction,” said Keith Juckes, Société Economist. Macro strategist in Générale, there is a note on Friday.
“There is a good chance that King Charles III will be the first British monarch to pay more than one pound to the dollar, or more than one pound to the euro, or both,” he added, adding that the pound was unlikely to fall below that. This year parity with the dollar.
UK banknotes bearing the Queen’s portrait will “remain legal tender”, the Bank of England said, announcing plans to print new currency with a portrait of King Charles after the end of the mourning period.
– Rob North, Sandra Gonzalez, Max Foster, David Wilkinson, Luke Magee and Morgan Povey contributed reporting.
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