Madeline Ratcliffe, a journalist for Sky News, reports that the trading floor is calmer and traders are more at ease today, however one dealer says the market is still bumpy.
I spoke to the senior trader at Monex Europe, Michael Quinn, who told me the quieter markets today were because traders were digesting after initially being spooked by the mini-budget.
That said, the weak pound was a sign investors were losing faith in the UK economy.
“Foreign currency markets are far more driven by sentiment, than by economic reality,” he said.
He added that the Bank of England was “very conscious” of being seen to do a “bad interest rate hike”, or a panicked hike.
“There’s a very real risk that that would be seen as a panic move from the Bank of England, and that’s why they’re having to tread very carefully.
“Fundamentally, more than anything, the Bank of England needs the UK economy to start recovering and there’s only a limited amount that monetary policy can do to address that,” Mr Quinn continued.
“So as things stand at the moment, the situation from a markets perspective looks fairly grim because the general expectation is that the Bank of England is going to have to hike interest rates fairly sharply in a bid to combat inflation.
“In reality, how it actually plays out, though, will depend far more importantly on government policy.
“Whether the government does announce any policies to reassure markets, however, is the million-dollar question.”