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Rishi Sunak has a host of economic issues to address as he takes office as UK prime minister. His job might be made somewhat easier if today’s financial market moves persist.

Sterling hit its highest level since early September – albeit helped by a drop in demand for the dollar, which has strengthened markedly since the summer.

And yields on UK government bonds (known as gilts) dropped – a sign that investors are buying more and that government borrowing costs have dropped. Gilt trading volumes dropped to their lowest level since 23 September, the day of the mini-budget that sparked the market chaos of the last month, according to trading platform MarketAxess.

Both of those developments could help the government: although it should not be overstated at this point, higher sterling would contribute to slowing imported inflation. And cheaper borrowing costs would also benefit the government.

But the moves will also be welcomed by a new prime minister who is trying to move on from the chaos of recent weeks. Plans to cut spending to try to reduce the government deficit will likely prove politically tricky as the UK battles a recession.

Alan Custis, head of UK equities at Lazard Asset Management, said:

The UK economy faces a perfect storm of high inflation, rising interest rates and low economic growth. Liz Truss’s premiership saw borrowing costs rise for the UK government, with a £40bn deficit this year, and so balancing the books is likely to be one of Rishi Sunak’s top priorities.

In other business and economics news today:

• Adidas has ended its partnership with Kanye West, saying it “does not tolerate antisemitism” after the rapper was suspended from Instagram and Twitter over offensive posts.

• HSBC has reported better-than-expected profits for July to September after the bank reaped the benefits of surging interest rates that have raised borrowing costs for customers.

• The prices of low-cost ranges of staples such as pasta, tea and chips have surged in the UK in the past year, with cooking oil shooting up 65%, according to figures that highlight how poorer households are being hit disproportionately by the cost of living crisis.

• The owner of Premier Inn and restaurant chains including Beefeater has reported a bounceback in profits to above pre-Covid levels but warned of a £60m increase in costs this year fuelled by soaring inflation.

You can continue to follow the Guardian’s live coverage from around the world:

In UK politics, Jeremy Hunt will remain as chancellor as Rishi Sunak reshuffles cabinet

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In our US coverage, Donald Trump’s aides reportedly face pressure to testify in Mar-a-Lago information case

Thanks for reading today, and do join us tomorrow bright and early for more coverage of business, economics and financial markets. JJ