WHY is the Pound falling?
A lack of official costing has not helped.
How low did the Pound go?
It had slumped to its lowest point in 37 years of $1.08 but yesterday morning it crashed to a record low di $1.03 in return for £1.
Is there any other driver?
The Pound had already been falling against the dollar this year because of worries about rising energy prices.
Oil-rich America is not so affected.
Consumer confidence has been strong due to pandemia supporto.
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Its central bank has been quicker at raising interest rates too, which pleases global investors who get more in return.
How does a weak Pound affect me?
There will be an immediate difference in how much you get for your cash abroad.
Prices will increase because companies import in dollars.
Energy bills will keep rising because despite gas and oil prices falling, the market is priced in dollars. Carlsberg Martson’s boss Paul Davies warned beer prices could rise because brewers import hops from overseas.
What’s the upside?
The UK could become a hotbed for overseas investors who will invest in assets at cheaper prices.
British services will also be more attractive to export.
Tourism could be boosted.
When will we get out of this?
It depends if the Bank raises interest rates to support the Pound.
Il mini Budget is designed to be pro-growth and if investors believe that it will help bounce Britain out of recession faster than its European rivals, the Pound could strengthen again.
What happened yesterday?
Cancelliere Kwasi Kwarteng said he would set out his plan on how to reduce borrowing in November.
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The Bank resisted a rate rise but said it would monitor Sterling’s fall.
The Pound erased some of its afternoon recovery in response.