By Amanda Cooper and Tommy Wilkes

LONDONSep 23 – Stocks hit two-year lows on Friday, the dollar hit a two-decade high and bonds sold again on investor fears of further interest rate hikes to tame inflation, while British assets fell after the announcement of major government-funded tax cuts.

* British assets were already falling but extended losses after Britain’s new finance minister unveiled a landmark tax cut agenda that will see government borrowing soar.

* UK bond yields headed for biggest daily rise in decades, and money markets expect Bank of England interest rates to be as high as 5% for May next year. Sterling fell 2%.

* The mood in markets has been dismal all week, with major central banks offering another 350 basis point rate hike to fight inflation, Japan’s intervention to prop up the yen and gloomy Purchasing Managers’ Index data on Friday, suggesting a further slowdown in the major economies.

* The US, UK, Sweden, US Switzerland and Norway, among other countries, are raising interest rates, but it is the Federal Reserve’s signal that it expects high rates to last into 2023 in the country driving the latest selling.

* Global stock index MSCI hit its lowest level since mid-2020 on Friday, having lost about 12% in the month since Federal Reserve Chair Jerome Powell, made clear that it is necessary to bring inflation down, despite the detrimental effects that may have.

* The euro fell for a fourth straight day after data showed Germany’s economic slowdown deepened in September as consumers and businesses grapple with a record energy crunch and soaring inflation.< /p>

* European stocks traded red for the second day in a row, weighed down by losses in everything from banks to natural resources to technology stocks.< /p>

* Pan-European < span class="caps">STOXX The 600 index fell nearly 2.2%, meanwhile DAX Frankfurt fell 1.94%, making it one of the worst performing European indexes.

* S&P emini futures fell 1.15%, indicating a lower start to the session. on Wall Street.

* London FTSE< /span> lost 1.9%, in a context where the pound sterling fell 2%, to hit another 37 year low and hit $1.1022 at the time.

* With US interest rates expected to rise faster and stay higher for longer, the dollar is at a two-decade high, while Treasury 10-year yields soared as investors dumped inflation-sensitive assets such as bonds.

* The yield on the 10-year debt rose 5 basis points to 3.776%, another 11.5-year high, and is on track for an eighth straight weekly increase.

* Eurozone 10-year bond yields also increased strongly, with the Italian 10-year yield hitting 4.294%, the highest since late 2013, ahead of Sunday’s Italian elections.

* The euro hit another 20-year low. , fell to a low of $0.9736.

* The dollar was up 0.4% against the Japanese currency, at 142.97 per dollar. Few believe the yen’s rise will continue as the Bank of Japan continues to have a dovish bias.

* Non-yielding gold has come under pressure, especially during the year-ago quarter, due to rising yields. It was down 1.55% at $1,644 an ounce, its lowest level in two years.