Mark Carney slams ‘undercutting’ UK’s infrastructure

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

A package of 45 billion tax cuts that mainly benefit the poor continues to mount after criticising Kwasi Kwarteng's mini-budget last Friday.

Sir Mark Carney, who preceded Andrew Bailey as the Bank of England governor, has accused the UK government of undercutting the UK's economic institutions. He told the BBC:

The fact that we have a partial budget, a tough global economy, a cross-purposes with the Bank, has resulted in a number of dramatic moves in financial markets. There was an undercutting of some of the institutions that underpin the overall approach. There isn't an OBR forecast. The Office for Budget Responsibility, the Office for Budget Responsibility, continues to slide despite Bank of England's emergency intervention to stabilise the bond market. This calmed nerves in the bond and stock markets, while sterling is under pressure.

Asian stock markets went up 0.95% with Japan's Nikkei up 0.95%, while Hong Kong's Hang Seng is down 0.35%.

The pound is trading 1.1% lower at $1.0766 this morning. The euro has weakened against the dollar by 0.75% to $0.9663. The dollar has been boosted by its safe-haven appeal and the Fed's interest rate hikes, but sterling has been the worst-hit major currency in recent days.

The Bank of England was forced to step in to manage a funding crisis for Britain's pension funds after Kwarteng's ill-received mini budget led to a bond selloff, which sent government borrowing costs spiralling. Over the next 13 working days, the central bank has set aside 65 billion dollars to buy longer-dated bonds to relieve pressure on pension funds and insurers.

Yields on gilts, as UK government bonds are known, especially 30 year bonds, fell sharply after the Bank moved. The 10-year benchmark bond fell to 4%. US Treasuries rebounded, as benchmark 10 year yields fell from over 4% to 3.7472%. Yields move in an inverse relationship to prices. If the Bank had done nothing, we would have had further moves up in government bond yields and possibly some pension funds that were unable to meet short-term obligations and knock-on effects that were beginning to show up. It would happen more than ripple, it would be cascade through financial markets to the counterparties that the pension funds deal with. The Bank acted because it has that structure and it rightly stepped in at the point when it was about not to function, which is why it was able to act.

Porsche's stock market debut is expected to be the second-largest initial public offering in German history.

It priced its shares at the top end of the announced range, at €82.50 a share. They are trading 2.9% higher before the official start of trading on the Frankfurt stock exchange later this morning.

Porsche is being spun out of Volkswagen and in a nod to its most famous model, Porsche has been split into 911 m shares. Porsche is owned by Porsche Automobil Holding, the investment vehicle of the founding Porsche and Piech family.