The British currency was down 1% in the afternoon at $1.1406, the lowest since Margaret Thatcher.
London, Thanasis Gavos
Sterling fell to lowest level against the dollar since 1985 as markets wait to see the details of the package of measures against energy uncertainty to be announced on Thursday by new UK Prime Minister Liz Truss.
The British currency fell 1% in the afternoon to $1.1406, a rate it has seen since the Margaret Thatcher and Ronald Reagan’s tax cut program.
Sterling had risen since Ms Truss took office on Tuesday, amid reports of great support package for households and businesses.
However, today there was concern about what this package will mean for the outlook of the British economy as the Prime Minister seemed to confirm that the tens of billions of pounds that will be required will come from fresh government borrowing and not e.g. from taxing the surplus profits of energy companies, as requested by the opposition.
Analysts say Liz Truss’ intention to review the terms of the independent Bank of England’s mandate amid the highest inflation in 40 years is adding to these concerns about a widening trade deficit and a worsening balance of payments.
Overall this year sterling has lost 15% of its value, registering in August the biggest slide since 2016, as noted by the Daily Telegraph.
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