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Sterling plunges… September 26, 2022

Posted by WorldbyStorm in Uncategorized.

Well, the new Tory leadership (not government – the distinction appears to have been lost on Truss and those around her. The wasn’t a vote for a new programme) have managed in their first week proper following the events around the former monarch, to have overseen a mini-budget so badly received across the road that…

International confidence in the UK has been badly hammered by the mini-budget, and the Truss government’s tax-cutting policies, and the pound is paying the price.

Sterling had plunged to a record low against the US dollar in Asia-Pacific trading, extending the losses suffered on Friday, and moving closer to parity.

Investors have been rocked by the bonanza of tax cuts announced in Kwasi Kwarteng’s mini-budget – with the UK chancellor pledging over the weekend to pursue more tax cuts.

The pound plunged nearly 5% at one point to around $1.0327, Reuters data shows, a record low since at least decimalisation in 1971, as belief in the UK’s economic management and assets evaporated.

And now there’s talk that the Bank of England needs to step in with higher interest rates. Of course in a beleaguered economic climate like the current one that’s not going to be easy for people either. As an LP MP noted as it stands the weak pound ‘drives up imports such as fuel’. The immiseration of many continues apace.
John Major’s credibility and that of the Tories was holed under the water in 1992’s Black Wednesday sterling crisis. Surely this must have some sort of similar impact?


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