But there was enough detail in her energy package to garner a negative reaction out of bond markets.
"Gilt and currency markets have not reacted well to the government's energy package," said Silvia Dall'Angelo, London-based senior economist at Federated Hermes Inc. "Gilts have sold off quite significantly since the prospect of large public borrowings emerged, due to concerns about the sustainability of public finances," which has led to higher risk premiums, she said. "While markets tend to overreact, sustainability concerns are not going to disappear," Ms. Dall'Angelo said.
Regarding fiscal intervention and government spending, "the trouble is, the bar has been lowered for these kinds of interventions," TwentyFour's Mr. Shannon said. "I'm not arguing against that, but now you're going to spend over £100 billion on gas — so what is next year's once-in-a-generation (problem that needs spending) — the market is not going to tolerate that."
The fiscal measures outlined by Ms. Truss will temporarily boost growth and put "a lid on inflation," Ms. Dall'Angelo said. Federated Hermes runs $632 billion in assets under management.
But that impact may be short-lived.
If fully enacted, the fiscal measures "will likely have a substantial impact on inflation, reducing it now but limiting its downward trend later," Matteo Cominetta, London-based senior economist at the Barings Investment Institute, said in an email. The institute is money manager Barings' proprietary research unit. Barings has $349 billion in assets under management.
Ms. Truss said the energy cap could reduce peak inflation by 5 percentage points in the coming months. But a fiscal package worth roughly £200 billion — equivalent to 8.6% of U.K. GDP — "fully financed by additional borrowing, will support spending in the next two years. In a context of still-constrained supply, the additional push should be inflationary, or at least limit the medium-term slowdown in inflation," Mr. Cominetta said in an email.
The limited impact of the energy cap on inflation is down to the fact that U.K. inflation is "very broad-based, driven by many factors beyond energy, as shown by core inflation, which nets-out energy and food and it currently runs at 6.2%" — the highest rate in 32 years, he added.
In the medium term, the inflationary environment will need to be combated by "more aggressive policy tightening. Higher inflation and policy rates, together with above-trend budget deficits for years to come all conjure a mix that is rather unpleasant for U.K. gilts," Mr. Cominetta said.
Mr. Cominetta added that the pound sterling is likely to remain under "intense pressure, as the highest rate of inflation in (Group of Seven) countries mixed with slowing growth and persisting Brexit uncertainties all should keep sterling volatility high."
While bond and currency markets will reflect reactions to Ms. Truss' leadership and policies, "it's less obvious what it means in equities, because in reality U.K. equities are global," LGIM's Mr. Roe said. If companies have a dollar exposure on their earnings, a weaker pound sterling means higher shares, he said. Therefore, when it comes to equities "everyone's first thought should be what's happening to the pound and commodity sectors, because we have quite high commodity-sector weights in the U.K.," Mr. Roe said.