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The pound falls amid political turmoil and economic gloom

T

he a pound fell sharply on Monday amid market concerns about political uncertainty and a bleak economic outlook.

As the race to become the next Tory leader gathers pace, with almost all candidates promising to cut taxes and increase growth, sterling down more than a cent against the US dollar will drop below $1.19.

It comes after the pound rallied late last week following the dramatic resignation of Boris Johnson.

Fiona Cincata, market analyst at CityIndex, said: “We know that last week the pound went flat against the dollar when Boris Johnson finally resigned. It was the relief rally we saw.

“That said, the pound is falling today and there will be a period of political limbo if we don’t see political decisions taken, and that at a time when the economy and the economic outlook is very dire is a bit of a worry for the pound.”

Mr Johnson, now acting prime minister, has vowed not to make any major decisions while the Tories choose their next leader.

But it has sparked fears he is leading a “zombie government” at a time when the country is facing a cost-of-living crisis.

Lord Butler, a former senior civil servant who served as Margaret Thatcher’s cabinet secretary, said he was confident the interim administration would be able to run the country for the next few weeks.

“The job of the public service is to keep the show on the road,” he said. “So it’s not very difficult and it’s not very long.”

Meanwhile, Sir Keir Starmer attacked the Tory leadership contenders, accusing them of a “fantastic economy”.

The pound falls amid political turmoil and economic gloom

Source link The pound falls amid political turmoil and economic gloom

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