Sharp fluctuations of major currencies inject new uncertainty into fraught global economic outlook.
“Of course, central banks in other jurisdictions such as the UK have also been raising interest rates, and the eurozone is planning to do likewise. Europe is on the verge of a recession and the UK’s new government has stirred crisis talk with its fiscal stimulus adding to its current account deficit.” Higher energy prices will in turn push up the cost of other goods and services. Japan is the only G10 country not to raise interest rates. The issue with aggressively large interest rate hikes is that it’s likely to push the economy into a recession, which no one wants to see.” “These countries will either have to tax their economies more, issue inflationary local money or simply borrow more. “The US allies are also having serious struggles. “So with the war in Ukraine, economic and political problems in Europe, high inflation, etc, it is not surprising investors are turning to the US dollar.” “The US dollar has always been seen as a safe haven for investors because the US is such a strong and large economy, so if there is global uncertainty, it’s always a safe bet to hold US dollars because it retains value well,” Tien said. The first is confidence in the US economy relative to its peers. “The new prime minister’s economic policy of lowering taxes on the wealthy is not too popular, and the consensus is that it will not work in stimulating the economy.” As the British pound plummets in value, the US dollar is flying high.
The British Pound is under siege as the Bank of England signals no action for now despite fiscal and monetary policy disparity undermining them.
It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. No representation or warranty is given as to the accuracy or completeness of this information. The loosening of fiscal policy at this stage of the cycle is also in stark contrast to other developed markets where repaying pandemic debt accumulation is a typical feature. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. According to the OECD, the UK is already one of the more deregulated countries in the world. The worry for markets from the announcement of these tax cuts is the ability of the UK government to fund their debt without paying away a significant risk premium.
Gas and food prices are expected to rise after the British pound's sharp decline, though the fall could also draw more tourists to the country.
In July, the euro [sank to even with the dollar](https://www.washingtonpost.com/business/2022/07/12/euro-us-dollar-parity/?itid=lk_inline_manual_5) for the first time in nearly two decades. [voted to exit](https://www.washingtonpost.com/business/economy/britains-exit-from-eu-sends-global-economies-into-tailspin/2016/06/24/b898124a-3a3f-11e6-8f7c-d4c723a2becb_story.html?itid=lk_inline_manual_5) the European Union in 2016. [to a record low](https://www.washingtonpost.com/world/2022/09/26/uk-gbp-pound-falls-usd-dollar/?utm_source=twitter&utm_medium=social&utm_campaign=wp_main&itid=lk_inline_manual_2) against the soaring dollar on Monday, spurring concerns of even higher inflation and prompting social media users to share defeatist memes about the world’s fifth-largest economy.
LONDON (AP) — The British pound stabilized Tuesday as U.K. authorities tried to ease investor concerns after the biggest tax cuts in 50 years sent the ...
“The world we are heading for is a bumpy few weeks,” Bell told Sky News. [prepared to boost interest rates](/article/inflation-prices-94f1b2ea777ec039ae307bd431b338f9) “as much as needed” to curb inflation, which is already running at 9.9%, the highest among major economies. “I was very pessimistic about the consequences of utterly irresponsible U.K. Our 70-year-high tax burden was also unsustainable,″ Kwarteng said in talks with investors on Tuesday following the so-called “mini-budget″ last week. Treasury also sought to reassure investors, saying it would set out a more detailed fiscal plan and independent analysis from the Office for Budget Responsibility on Nov. LONDON (AP) — The British pound stabilized Tuesday as U.K.
The British pound stabilized Tuesday as U.K. authorities tried to ease investor concerns after the biggest tax cut in 50 years sent the currency tumbling to ...
“The world we are heading for is a bumpy few weeks,” Bell told Sky News. [prepared to boost interest rates](https://apnews.com/article/inflation-prices-94f1b2ea777ec039ae307bd431b338f9) “as much as needed” to curb inflation, which is already running at 9.9%, the highest among major economies. “I was very pessimistic about the consequences of utterly irresponsible U.K. Our 70-year-high tax burden was also unsustainable,″ Kwarteng said in talks with investors on Tuesday following the so-called “mini-budget″ last week. Treasury also sought to reassure investors, saying it would set out a more detailed fiscal plan and independent analysis from the Office for Budget Responsibility on Nov. The U.K.
Pound's value against US dollar has plummeted 22.01% in 12 months, estimates indicate turbulence is far from over - Anadolu Agency.
[Anadolu Agency website contains only a portion of the news stories offered to subscribers in the AA News Broadcasting System (HAS), and in summarized form. The EU refuses to renegotiate the protocol, which the Conservative Party and the DUP say has created a sea border for trade between Northern Ireland and the rest of the UK. The energy crunch caused by the war in Ukraine and the British government’s subsequent move to cap energy bills has also played a role in the country’s inflation woes. When the British decided to leave the EU, the exchange rate plunged from $1.50 to $1.33 in the space of a few hours, and ended the year at $1.22. In the four days since the Truss government unveiled its mini-budget, the pound slipped from 1.17 against the dollar to 1.07, a body blow to a currency that has weakened consistently in the face of economic challenges over the past eight years. Income tax has also been reduced from 20% to 19% for lower-income earners, a relatively smaller cut for a group bearing the brunt of the UK’s cost of living crisis triggered by spiraling inflation and energy costs.
The British pound stabilized Tuesday as U.K. authorities tried to ease investor concerns after the biggest tax cut in 50 years sent the currency tumbling to ...
“The world we are heading for is a bumpy few weeks,” Bell told Sky News. comes from the United States, according to the Wine and Spirit Trade Association. A fifth of all bulk wine imported to the U.K. Late Monday, the central bank said it was “closely monitoring’’ financial markets and was prepared to boost interest rates “as much as needed” to curb consumer prices. Some economists warn that the pound could reach parity with the dollar later this year for the first time. Treasury also sought to reassure investors, saying it would set out a more detailed fiscal plan and independent analysis from the Office for Budget Responsibility on Nov.
In Greece, the sterling crisis has stirred memories of the 2010 financial emergency, when rising borrowing costs raised the spectre of a Greek economic collapse ...
the jewel in the crown, the British pound, has lost its shine.” But as in those rollercoaster days – and with more than two years to go before general elections in the UK – Greek analysts said it would be hard to predict what the endgame would be. “But if there are two more years of this Britain will have to go through a bungee jump, there’ll be rollercoaster days before it gets there.” The Irish Times said that, learning from the London experience, “the message sent out by the budget needs to be one of stability and involving a credible plan for public finances. “Such unrest is more familiar in the emerging markets, but not in a highly developed economy like the British one. “Ministers Paschal Donohoe and Michael McGrath have been delivered a real-time exhibition in exactly how not to do it,” the Irish Independent said in an editorial. Although Britain has been through many tribulations in recent years, it is the world’s sixth-largest economy, it has a stable political system, and London is one of the world’s biggest financial centres. “They make no sense either politically or economically,” said one well-placed official expressing disbelief that Kwarteng had decided to ignore budget forecasts. Prime Minister Truss cannot afford a balance of payments crisis.” In Ireland, commentators said that the “British blowout” had clearly backfired, and urged the Irish government, which is to unveil its own budget on Tuesday, to heed the lesson. Now, he said, “they face a humiliating currency crisis”. He said this in itself indicated a loss of credibility.
On this week's episode of “The Market Report,” Cointelegraph's resident experts discuss the fall of the British Pound and its impact on the cryptocurrency ...
[Cointelegraph Markets Pro](https://pro.cointelegraph.com/?via=news), a platform for crypto traders who want to stay one step ahead of the market. [Charles Hoskinson and Ethereum dev get into a war of words post-Vasil upgrade](https://cointelegraph.com/news/charles-hoskinson-and-eth-dev-get-into-a-war-of-words-post-vasil-upgrade) British pound drops to all-time low against the dollar](https://cointelegraph.com/news/is-it-bitcoin-s-time-to-shine-british-pound-drops-to-all-time-low-against-the-dollar) [record low against the United States dollar](https://cointelegraph.com/news/gbp-follows-euro-the-pound-dollar-rate-hits-all-time-low) following the announcement of tax cuts and further debt increases to curb the impact of a possible economic recession. Data from [Cointelegraph Markets Pro](https://pro.cointelegraph.com/?via=markets&_ga=2.142027444.742658523.1640948929-762064149.1640948929) and [TradingView](https://www.tradingview.com/symbols/BTCUSD/?exchange=BINANCE) followed BTC/USD as it added over 7% after the Sept. [BTC](https://cointelegraph.com/price-indexes)) price aim higher, but concerns remain over what happens next.
The turmoil reached a new level of intensity this week, sparked by the reaction of financial markets to the UK mini-budget, which handed out £45 billion in ...
The whole world had to watch what was happening in Britain because it was a “test case for the confidence game that’s likely to be repeated everywhere.” In a comment published in the Australian Financial Review on Monday, columnist Karen Maley cited remarks by Michael Hartnett, an investment strategist at Bank of America. This is under conditions where the crisis of the British pound is the sharpest expression of the slide in all currency values against the dollar due to ongoing hikes in US interest rates. In “normal” conditions rises in the order of just 0.5 percentage points, or even less, are considered large. That is now clearly unfolding, centring on, but by no means confined to, the British pound. And it has a historical resonance. “The nature of the UK measures will likely increase inequality,” it said. Authers raised the broader implications. The bank is also reducing its holdings of financial assets. This struggle, now being joined by ever-wider sections of the British working class, is creating the basis for a general strike against the Tory government. No shock this great and this sudden has happened before.” This led to a rapid sell-off of government bonds, sharply lifting their yields, or interest rates.