Pound will be worth less than dollar if Bailey fails to act, warn economists – live updates
It doesn’t look like the Chancellor will be making a statement today, as Downing Street declines to comment on the pound’s dramatic fall.
The slump in the pound is a further blow to Brits at a time when households are already being squeezed, as my colleague Eir Nolsoe reports:
Calls are growing for the Bank of England to intervene urgently to help the ailing pound.
Labour Keir Starmer – Stefan Rousseau/PA Wire
Pound sterling dollar iPhone – AP Photo/Jae C. Hong
Gerard Lyons Liz Truss economy – Jeff Gilbert
The latest slump in the pound makes it the worst performing G10 currency in the year to date.
Healthcare stocks AstraZeneca and GSK also gained.
Pound dollar beer Carlsberg Marston’s – etty Laura Zapata/Bloomberg
That would take rates to 3.75pc.
Simon Harvey, head of FX analysis at Monex Europe, reckons the Bank of England may need to intervene with an unscheduled interest rate rise.
If the sell-off continues and widens into broader markets, there’s a risk Liz Truss’s administration will be forced to respond.
While the Chancellor’s tax-slashing Budget is behind the pound’s decline, the euro is struggling on signs Italy’s far-right alliance is on track to take power.
It’s looking increasingly likely that the pound will fall to parity against the dollar this year.
Asked whether she was “recklessly running up the deficit”, the Prime Minister said: “I don’t really accept the premise of the question at all.”.
Chancellor Kwasi Kwarteng – JEFF OVERS/BBC
Sterling tumbled to a record trough on Monday as traders scampered for the exits on speculation the new government’s economic plan will stretch Britain’s finances to the limit.
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