Pound Sinks as UK Economic Uncertainty Rises

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BBC: The pound fell against the dollar on Friday as new figures showed a gloomy picture for the UK economy.

Sterling slipped to $1.11, after rallying on Thursday as Prime Minister Liz Truss resigned.

It came as official figures showed government borrowing rose to its second highest September on record.

Meanwhile, people are shopping less than they did before the coronavirus pandemic, according to figures from the Office For National Statistics (ONS).

Retail sales fell by more than expected last month, dropping 1.4% and continuing their slide from August, the official figures showed. />
The pound's latest slide comes after a period of volatile trading for the currency. » | Noor Nanji, Business reporter, BBC News | Friday, October 21, 2022

The pound sterling used to be held in high regard all over the world. Unfortunately, its value has gone down and down and down. This is known as managed decline. At the rate things are going for the UK economy, the pound sterling will be little better than junk currency! (Though it hurts me to say so.)

We should have dumped the pound years ago and joined the euro.

For your information, just by way of example, in 1963, the pound was worth more than twelve Swiss francs! 12,2443 to be precise. Today, as I write this, one Swiss franc (CHF) is worth £1.12. In 1963, one pound sterling was worth US$ 2.8. Today, one pound sterling is worth US$1.12. Exactly the same as the Swiss franc.

(Sources: XE.com and PACIFIC Exchange Rate Service)

Pound Falls as Weak Retail Sales Raise Fears UK Economy Is in Recession

THE GUARDIAN: Sterling drops by more than 1% against dollar to $1.1351, its lowest since 1985

The pound sank to a fresh 37-year low against the dollar on Friday after weaker than expected retail sales raised fears that the British economy is already in recession.

Sterling fell by more than 1% against the currency to $1.1351, its lowest since 1985, partly reflecting broader dollar strength as well as specific concerns about the outlook for Britain. The pound also hit a 17-month low against the euro, with €1 worth 87.66p.

It came as the latest official data showed cash-strapped consumers cut back on spending by more than expected in August, when retail sales volumes in Great Britain fell by 1.6%. Economists had predicted a more modest fall of 0.5%. » | Phillip Inman | Friday, September 16, 2022

Pound Slides as Fears Mount for UK Economy

BBC: Worries over the prospects for the UK economy led the pound to slide 5% against the US dollar in August.

Sterling sank again on Thursday morning, dipping below $1.16 on the currency markets.

Analysts said the fall reflects the darkening outlook for the economy, with consumers and businesses facing rising prices and soaring energy bills.

The Bank of England has predicted the UK will fall into recession towards the end of this year.

The weak pound means Brits travelling overseas will find their spending money will not stretch as far.

"Our economic prospects are not looking particularly good compared to the rest of the world," said Laura Lambie, senior investment director at Investec.

Ms Lambie said that recession fears were weighing on markets, with the investment bank Goldman Sachs warning this week that the UK could remain in recession until 2024.

A recession is defined as the economy getting smaller for two consecutive three-month periods. » | Noor Nanji, Business reporter, BBC News | Thursday, September 1, 2022

Euro Nears Parity with Dollar as Pound Hits Two-year Low

THE GUARDIAN: Europe’s single currency battered by fears over gas supply from Russia and US interest rate rises

One euro coin placed on top of one dollar bills Photograph: Gerard Bottino/SOPA Images/REX/Shutterstock
The euro is on the brink of parity with the dollar as investors fear that an energy crisis will plunge the region’s economy into recession.

The single currency fell to just $1.0003 on Tuesday morning, pushed lower by worries that the scheduled shutdown of the Nord Stream 1 pipeline – which transports natural gas from Russia to Europe – for maintenance could be made permanent.

Russia’s invasion of Ukraine in late February has triggered fears over Europe’s energy supply and hurt the region’s economies, pushing the euro 12% lower against the US dollar so far this year.

The euro is also being hit by expectations of further aggressive interest rate rises by the US Federal Reserve, which are driving the dollar higher. » | Julia Kollewe and Graeme Wearden | Tuesday, July 12, 2022

Business Live: Euro falls to brink of parity with dollar over fears Russia will cut off gas supplies »

Weak Pound Puts the Squeeze on Holiday Spending

BBC: The pound's weakness against the dollar and the euro spells bad news for British holidaymakers this summer.

Fears over the UK economy are weighing on markets, causing sterling to sink below $1.20 on Tuesday, its lowest level since the start of the pandemic, before partly recovering on Wednesday.

Versus the euro, the pound is hovering near thirteen-month lows.

As a result many Brits traveling abroad in the next few weeks will find their spending money won't stretch as far.

"The pound remains a very vulnerable currency," said Jane Foley, head of foreign exchange strategy at the Dutch bank Rabobank.

"A lot of this is related to fears about growth," she continued, noting that political uncertainty and a potential trade conflict with the European Union were likely to add to investors' concerns about the UK's economic outlook. » | Noor Nanji, Business reporter, BBC News | Wednesday, June 15, 2022

The Dramatic Drop in Sterling Is Only a Taste of What Is to Come

THE GUARDIAN: The threat of a no-deal Brexit has sent the pound plummeting. The British people must be given a chance to halt it

As our currency plummeted last week, politicians were remarkably quiet. In normal times, a catastrophic slide in the pound would send a shockwave through Westminster. An emergency cabinet meeting might have been called. The chancellor might have made an announcement, calming markets and reassuring the public.

But these aren’t normal times. Over the past three years, politics has been increasingly blind to the concerns of ordinary people. The Brexit debate is stuck on abstract constitutional issues such as the backstop. While they are important matters, the relentless focus of public discourse on them means that we are in danger of forgetting about the lives of real people. Westminster is gripped by a fanatical race towards a cliff-edge Brexit and nobody is stopping to think about the impact it would have on the everyday lives of the people we serve as politicians.

The falling pound is a perfect example. Consider for a moment the situation we find ourselves in. Three years on from the referendum, and sterling has now fallen by 15% against the euro. On average, the pound is now weaker than it was at the height of the financial crisis. » | Sam Gyimah | Thursday, August 8, 2019

Whatever They Say about Brexit, Sterling’s Nosedive Tells Us the Truth

THE GUARDIAN: The falling pound betrays the lack of confidence in Britain’s future. It can’t be blagged away, even in a post-truth world

If you are reading this and earn your living in UK currency, you are already poorer today than you were before June 2016. And you will be poorer by the end of the year if a no-deal EU exit comes to pass. If you have savings in sterling, then you’re in even more trouble.

In the post-truth world we have been living in for the past three years, there’s one thing that cannot be blagged away, cannot be accused of bias, cannot be propped up by a gust of groundless optimism – the British pound. It is quite literally a sovereign, bowing to no ideology or political pressure. As elegantly and neutrally as a force of nature, it rises and falls as it divines the direction of the country’s economy. That direction, according to the pound’s nosedive over the past few weeks, is downwards.

You might not yet have noticed what economists call “the pass-through effect”, the impact of changes in the exchange rate on domestic prices for traded and non-traded goods. But it is here. We are all experiencing it now, in some way. It’s not just holidaymakers, many of whom are shocked that they are getting fewer euros than pounds at airport exchange bureaux or ATMs (in the past week, even dollars were informally trading at parity, a significant milestone in the pound’s depreciation). » | Nesrine Malik | Sunday, August 4, 2019

Pound Slumps as Poll Shows UK Conservatives Losing Majority

Weak Pound Melts the British Dream of a Place in the Sun

THE GUARDIAN: Demand from Britons for holiday homes in Spain and Greece has fallen sharply as Brexit uncertainty and the fall in sterling drive house hunters away

Brits abroad? Not so many, it seems. Uncertainty about the future of Britain in Europe and the fall in the value of the pound are taking their toll on the number of UK buyers investing in a little place in the Mediterranean sun.

A report by Spain’s Association of Land and Commercial Registrars last week revealed British demand for second homes in Spain was down nearly 30% on last year’s pre-referendum levels.

In Greece, where property taxes have soared amid the debt-stricken economy and there are lingering fears that the country could yet be ejected from the eurozone, estate agents on some of the more popular Greek islands are reporting an even bigger plunge in the number of Britons looking for homes since the Brexit vote. » | Stephen Burgen in Barcelona and Helena Smith in Athens | Friday, April 28, 2017

Sterling Receives A Severe Pounding

On a quiet day in US markets, John Authers looks at a sharp fall for the pound following a doveish report from Mark Carney of the Bank of England. Market expectations for UK inflation have been growing. Even as gilts have recovered ground lost after the Brexit referendum.

What Does the Falling Pound Mean for You?

Pound sterling 'likely to plunge to new record 31-year low once Article 50 is triggered' »

UK: Pound Drops to 31-year Low against Dollar on Brexit Fears

The British Pound is at its lowest level against the dollar for 31 years.

The drop is the result of growing fears of a so-called "Hard Brexit" and that Britain will be forced out of the European single market during negotiations to leave the EU.

Al Jazeera’s UK correspondent, Barnaby Phillips reports from central London.

Pound Slumps to Four-month Low against Dollar

THE GUARDIAN: Sterling drops to $1.4991 and could slip further, affecting Britons' spending power at start of summer holiday season

The pound has tumbled below $1.50 against the dollar as traders continue to scale back bets of higher interest rates in the UK, following the Bank of England's surprise statement on Thursday.

Sterling slid to a four-month low of $1.4991, the weakest since mid-March, extending the sharp losses that followed the BoE's warning that markets had been wrong to price in rate hikes for the near future.

The pound could fall further still, analysts warned, denting Britons' spending power at the start of the summer holiday season. Sterling also weakened against the euro, though not as markedly.

The drop in sterling follows a statement from Mark Carney's first policy meeting that sought to quash investor expectations that the bank preparing to reduce monetary stimulus. » | Katie Allen | Friday, July 05, 2013

Pound Drops to New Two-and-a-half Year Low
THE DAILY TELEGRAPH: Sterling fell below $1.49 on Monday morning, as a strong dollar and fears over easing continue to hammer the British currency.

The pound dropped to its lowest in 32 months against a fortified dollar on Monday to $1.4871.

Kathleen Brooks, research director at currency trader Forex.com, said that while the dollar's "new found strength" was a key factor, the continued slide of the pound also betrayed traders' nerves that the Bank of England may be on the brink of ramping up its asset purchase programme.

"While the Bank of England did not increase quantitative easing on Thursday, we think it's waiting in the wings," she said, adding that traders are expecting the minutes of the Bank's Monetary Policy Committee, which will be published on March 20, to show the decision "came down to the wire, maybe by just one vote."

Much better-than-expected US jobs data released on Friday, showing unemployment hit a four-year low, reinforced an already-rising dollar amid a wave of positive data from the world's biggest economy last week. » | Denise Roland | Monday, March 11, 2013

Bank of England Holds Interest Rates at 0.5pc and Opts for No More QE
THE DAILY TELEGRAPH: Bank of England policymakers have kept interest rates at 0.5pc and decided against pumping more money into Britain's ailing economy by opting not to restart gilt purchases.

The Bank said on Thursday that the key interest rate and bank rate would be held at a record low of 0.5pc and its asset purchase total would remain at £375bn.

The Monetary Policy Committee had been expected to leave interest rates on hold at 0.5pc, but economists believed there was a strong possibility that it would increase its quantitative easing programme by £25bn, taking it to a total of £400bn.

James Knightley, an economist at ING, had been expecting a £25bn increase. But, he said the "steep fall in sterling seen in recent weeks may have made the Bank of England more cautious".

The pound had come under pressure this morning, dropping to its lowest level in more than two and a half years against the dollar amid growing signs the Bank could welcome more easing.

But, sterling made a sharp recovery after the Bank's announcement, spiking back above the key $1.50 level. » | Rachel Cooper, and agencies | Thursday, March 07, 2013

Pound Falls to Two-year Low as Currency Markets Lose Faith in UK Economy
THE GUARDIAN: Sterling down to $1.51 as investors digest loss of AAA credit rating and increasingly gloomy economic outlook

Sterling fell to a two-year low on Monday as currency markets signalled their waning confidence in the UK economy's ability to exit the longest depression in 80 years.

The pound, which has tumbled by 8% in recent weeks, fell to $1.51 as investors digested the loss of Britain's AAA credit status and the increasingly gloomy economic outlook from independent forecasters. As recently as December it was trading at $1.63.

The ratings agency Moody's, which downgraded the UK to the lower AA1, joined many analysts in predicting that the economy will be held back by a longer than expected period of low growth and bigger debt mountain. » | Phillip Inman, economics correspondent | Monday, February 25, 2013

Pound Continues to Weaken against Dollar and Euro
BBC: Sterling has continued to weaken against the dollar and the euro on continued worries about the health of the UK economy.

Against the dollar, sterling fell to a seven-month low, and against the euro it was nearing a 15-month low.

The falls came after Bank of England policymaker Martin Weale said that sterling may need to weaken further to bolster the UK economy.

Currency speculators are also betting that sterling will fall, data shows.

Sterling fell 0.5% to $1.543, its lowest since 13 July, 2012. The euro was up 0.3% against sterling, making a euro worth 86.3 pence.

The pound has been weakening this year following some disappointing economic data and worries that the UK may lose is triple-A credit rating.

In a speech on Saturday Mr Weale said the currency may need to weaken further, helping to make exports cheaper and boost growth. » | Monday, February 18, 2013

Stock Markets Slump as Euro Hits 11-month Low against the Dollar

THE GUARDIAN: Italy's crucial 10-year bond rate rises to 7.17% amid fears it will be forced to seek bailout

Stock markets slumped and the euro hit a fresh 11-month low against the dollar amid renewed fears that Europe will be forced to rescue Italy and Spain from a lending boycott by international investors.

The FTSE index of Britain's top 100 companies dropped 2.25% to lead falls on continental exchanges and the US markets in a day of volatile trading. France's CAC 40 was the worst performer among major European indexes, falling 3.3%, followed by Italy's FTSE MIB, which dropped 2.8%.

Investors singled out Italy for more pain as they sent the interest rate on the all-important 10-year bond past 7% to hit 7.17%. The euro fell to €1.30 against the dollar, the lowest since January. » | Phillip Inman, economics correspondent, and Ian Traynor in Brussels | Wednesday, December 14, 2011

THE GUARDIAN: Why the euro is taking a pounding: The Brussels summit did not produce a plan to save monetary union, the eurozone is heading for a double-dip recession and safe-haven plays are benefiting the US dollar and sterling » | Larry Elliot, economics editor | Tuesday, December 13, 2011

Vor Cameron-Besuch: Schäuble prophezeit Ende des britischen Pfunds

FOCUS ONLINE: Der Deutschland-Besuch des britischen Premiers Cameron steht unter schlechten Vorzeichen. Im Streit um die Einführung einer europaweiten Finanztransaktionssteuer liegen vor allem auf der Insel die Nerven blank. Nun gießt Finanzminister Schäuble auch noch Öl ins Feuer.

Vor dem Deutschland-Besuch des britischen Premierministers David Cameron gibt es zwischen Berlin und London nicht nur wegen der geplanten Einführung einer europaweiten Finanztransaktionssteuer zum Teil erhebliche Differenzen. Großbritannien hatte die 17 Euro-Länder mehrfach gedrängt, die Schuldenkrise in den Griff zu bekommen. Das EU-Land gehört nicht zur Euro-Gruppe. Es wachsen Befürchtungen über eine Spaltung Europas in eine EU der 27 und die Eurozone.

Das Recht Großbritanniens, vorläufig nicht der Euro-Zone anzugehören, steht für Bundesfinanzminister Wolfgang Schäuble (CDU) nicht zur Diskussion. Die 17 Euro-Länder benötigten aber Regelungen, damit der Euro stabil sei. Dies fordere übrigens auch Cameron, weil es Ansteckungsgefahren aus der Euro-Krise auch für das britische Pfund geben könnte. Je besser dies gelinge, umso schneller werden sich in den Augen Schäubles andere, die heute noch nicht zur Euro-Zone gehören, von den Vorteilen dieser gemeinsamen Währung überzeugen. Es werde zwar noch ein bisschen dauern. Aber eines Tages werde ganz Europa eine Währung haben. „Aber es geht vielleicht schneller, als mancher heute auf der britischen Insel glaubt“, fügte Schäuble hinzu. » | jba/dpa/dapd | Freitag 18. November 2011

WELT ONLINE: Schäuble sagt das Ende des britischen Pfunds voraus: Greift die Euro-Krise auf die britische Währung über, hätte das gravierende Folgen. Finanzminister Schäuble schließt den Untergang des Pfunds nicht aus. » | dpa/Reuters/tat | Freitag 18. November 2011

FUNDWEB: German finance minister predicts end for sterling: Wolfgang Schäuble, the German finance minister, has predicted the end of the British pound in an interview with newspaper ‘Die Welt’. ¶ In the interview, the finance minister says the day where the whole of Europe was united under a common currency would arrive “faster than many people believe today in the British Isles”. » | Rob Langston | Friday, November 18, 2011

Pound Forecast to Tumble on 'Insane' Spending Cuts
THE SUNDAY TELEGRAPH: Britain's spending cuts have been branded as "absolutely insane" by one of the world's leading currency traders, who expects the pound to tumble beyond the low it has set this year.

"I think what Britain is doing is absolutely insane" John Taylor, the founder of the $8bn FXConcepts fund, told The Sunday Telegraph. "The Conservatives will lose their stomach for this."

Reducing Britain's £156bn budget deficit is the cornerstone of the government's plan for restoring the economy's health. George Osborne, the Chancellor of the Exchequer, told Parliament last week that the £81bn in spending cuts would pull "Britain back from the brink."

Although Mr Osborne's plan has won support from many economists, there remains concern that it will damage a recovery that is already showing signs of faltering.

"The last retail sales numbers were pretty ugly and then we have to go through the VAT hit," said Mr Taylor, who at 67 is one of the oldest operators in the foreign-exchange markets. The pound will fall below 1.40, possibly this year, he expects. Sterling reached 1.43, its weakest against the dollar this year in May.

The Bank of England has publicly welcomed sterling's decline since the financial crisis erupted in 2008, but the central bank is not alone. Having already yanked hard on monetary and fiscal levers, an increasing number of governments are eyeing a weaker currency as a way of securing their share of an uneven global recovery. >>> Richard Blackden in New York | Sunday, October 24, 2010

Since when do currency traders understand economics? – © Mark

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