NEW YORK - The pound surged against the dollar as Britain's fourth finance minister in as many months sensationally ripped up a tax-cutting budget that had spooked markets.
Chancellor of the Exchequer Jeremy Hunt axed almost all of the debt-fueled tax cuts unveiled last month by the new government of Prime Minister Liz Truss, reassuring markets that had tanked and pushing the pound to an all-time low against the dollar.
The pound rose more than two percent against the greenback at its peak, while US and European equities advanced and oil prices inched lower.
"No government can control markets but every government can give certainty about the sustainability of public finances," Hunt said in a televised address that demolished the maligned budget.
Yields on UK government bonds, or gilts, slid on Monday's fiscal policy U-turns as London's benchmark FTSE 100 shares index pushed higher, along with Frankfurt and Paris.
"The markets are responding positively to the new chancellor's plans to reverse almost all of the tax cuts announced by his predecessor," noted Victoria Scholar, head of investment at Interactive Investor.
All three main indices on Wall Street rebounded on Monday, with the S&P 500 winning 2.7 percent.
Bank of America became the latest US financial heavyweight to top estimates following on the heels of JPMorgan Chase and other banks that reported solid results on Friday.
Analysts have been hopeful that a successful third-quarter earnings season could reset a market that has tumbled in 2022 due to worries over inflation and Federal Reserve interest rate hikes.