UK Chancellor Sunak is preparing to break the Conservative party’s “triple lock” state pension pledge – FT

Early Wednesday morning in Asia, The Financial Times (FT) came out with the news suggesting that the UK’s ruling Tory party’s “triple lock” state pension pledge is in danger amid the coronavirus (COVID-19) fallout.

Key quotes

Rishi Sunak is preparing to break the Conservative party’s “triple lock” state pension pledge, amid Treasury fears that the policy could soon become unaffordable because of the fallout from the coronavirus crisis.

The UK chancellor’s willingness to break a 2019 Tory manifesto commitment is a sign of how the Covid-19 pandemic is forcing the government to confront political taboos.

Mr. Sunak has been warned that unless he breaks the pledge next year, the value of the state pension could rise sharply. The triple lock ensures the state pension goes up by whichever is higher-wages, inflation or 2.5 percent.

FX implications

Although the news poses a long-term challenge to Boris Johnson-led Conservative party, it hardly got any audience after the publish. That said, the GBP/USD pair takes rounds to 1.2570, mostly unchanged in the last hour, following the news.