Tezos

British pound plummets to record low against the dollar

Creator

tz1WGoDArdPdHSXqkdPgr7gven7geDJaZKxu

Description

"The British pound crashed to a record low against the US dollar on Monday on growing fears about the stability of UK government finances. The currency slump follows British Chancellor of the Exchequer Kwasi Kwarteng's announcement on Friday that the United Kingdom would implement the biggest tax cuts in 50 years at the same time as boosting government borrowing and spending in the face of high inflation. "Serious questions are already being asked about the economic competency of the new government," said Craig Erlam, senior market analyst at Oanda. "So much so that markets are factoring in a strong chance of a substantial emergency rate hike from the Bank of England in order to shore up the currency and confidence in the markets." The new tax-slashing fiscal measures, which include scrapping plans for an increase in corporation tax and slashing the top rate of income tax, have been criticized as "trickle-down economics" by the opposition Labour Party and even lambasted by members of the Chancellor's own Conservative party. Kwarteng doubled down at the weekend, hinting in TV interviews Sunday of more tax cuts to come, saying Friday's measures were "just the start" as the government goes all out for growth. Former Tory chancellor Lord Ken Clarke criticized the tax cuts on Sunday, saying they could lead to the collapse of the pound. "I'm afraid that's the kind of thing that's usually tried in Latin American countries without success," Clarke said in an interview with BBC radio. The pound has been hammered by a string of weak economic data, but also the steep ascent of the US dollar, a safe haven investment that sees inflows in times of uncertainty." 09/26/22 https://edition.cnn.com/2022/09/25/business/british-pound-drops-record-low-intl-hnk/index.html

Traits

Tag

british pound