Pound horror as Sterling bombs to lowest level since 1985 - Major blow for Truss
THE POUND has bombed to its weakest level in almost four decades in a major blow for Liz Truss just two days into her premiership.
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Analysts have argued this latest decline is largely a result of the Tory leader’s entrance to No10.
Jordan Rochester, an analyst at Nomura, told the Telegraph: “A change of leadership is usually pound positive, especially when up to £130billion of fresh deficit spending may be on the agenda.
“But the current crisis is unlike any we’ve seen in the recent past.”
He commented on Ms Truss’s new package for energy bill support and its impact on the UK’s trade deficit.
Mr Rochester said: “It’s a recipe for the balance of payments to continue to deteriorate, the UK’s terms of trade to worsen and with it the the pound’s value to fall.”
Others suggested, however, that it was unfair to pin the news on the new Prime Minister.
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Instead, he added, it was “all to do with strong dollar and global prospects”.
Mr Evans said there was also a positive side to the story: that a “low pound is good for exports”.
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“Government spending is a positive factor, but in terms of actual economic growth and living standards, the UK is still facing huge headwinds.”
After becoming the country’s 56th Prime Minister, Ms Truss said the UK can “ride out the storm” of the cost-of-living crisis.
Giving her first speech at Downing Street as PM, she said she was “determined to deliver” and that she was hoping to ensure “prosperity for all”.
Ms Truss added that the British people had “the grit and determination” required to “take those challenges” which they face.