British Pound Plummets to All-Time Low Against U.S. Dollar, Sparking Inflation Fears
variety.comNaman Ramachandran Following a “mini-budget” presented by new U.K. Chancellor of the Exchequer Kwasi Kwarteng last Friday, the British pound has fallen to an all-time low against the U.S.
dollar. From a high of $2.50 to £1 in 1971, the pound crashed to $1.033 on Monday morning. It has since recovered to $1.08. The steep decline is attributed to the financial market’s lack of faith in Kwarteng’s fiscal measures, which included tax cuts across the board.
Monday’s fall could be due to remarks Kwarteng made on Sunday, hinting at further tax cuts. If these cuts are fully funded against borrowing by the U.K.
government, the country could be looking at a mountain of debt. In real terms, for the U.K., which is undergoing a cost-of-living crisis and reeling from post-Brexit trading losses, life will become even more expensive than it is, because most international buying, including technological products and fuel, is in U.S.
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