The U.K. government announced a new fiscal package last week and, while most of the measures were expected, the market has reacted fiercely. The situation remains fluid, and the outlook will largely depend on the future monetary and fiscal policy mix. While we expect a credible monetary policy response from the Bank of England (BOE), U.K. financial market volatility is likely to remain high. What did the government announce? The government confirmed that it will cap energy bills for households and businesses. It will also cut National Insurance (a form of income tax) from November this year and cancel the planned ... (full story)