The pound sterling sank this Monday to record lows against the dollar, also falling against the euro (to a two-year low), after Finance Minister Liz Truss Kwasi Kwartenghave announced that the British government will implement the biggest tax cuts in the last 50 years, while raising public spending forecasts.
With the Labor opposition warning that these two decisions, at the same time, will cause a sharp drop in the value of the currency, the British pound fell more than 4%, after already being down 2.6% on Friday, around at $1.03. .
In recent weeks, the value of the pound has already been penalized by the wave of dismal economic data in the United Kingdom, while on the other side of the Atlantic the dollar has been buoyed by interest rate hikes by the US Federal Reserve.
The sharp fall in the value of the pound is generating some rumors that the Bank of England could call an extraordinary meeting to announce a rise in interest rates (one more, after the one announced last week) as a way of trying to contain the rate devaluation change.
Source: Observadora
