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HONG KONG – The British pound plunged to a record low against the US dollar today as traders grow increasingly fearful of a deep recession in the United Kingdom after new Finance Minister Kwasi Kwarteng unveiled a controversial tax-cutting mini-budget.
Sterling dropped to as low as US$1.0350 in early Asian trade, according to Bloomberg data, with some commentators warning it could sink to parity with the greenback.
Investors began dumping the pound on Friday after Kwarteng, who was put in place by Liz Truss after she became prime minister earlier this month, set out plans to slash taxes in a bid to kickstart the ailing British economy.
And the selling continued today after he said he intended to unveil further reductions, despite his budget causing ructions on London’s markets, with the FTSE 100 losing around 2%. – AFP, September 26, 2022