- Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, Fed, GBP, Inflation, Prime Minister, Sterling, UK, Uncategorised
- September 7, 2022
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Sterling slipped against a rampaging dollar this morning, lingering near 2-1/2-year lows.
Sterling had reached as high as $1.1609 a day earlier as media reports offered new details about how incoming Prime Minister Liz Truss is planning to tackle Britain’s growing energy crisis, before losing steam.
The dollar hit a 24-year high versus the Japanese yen and tested a two-decade high against the euro, after U.S. economic data reinforced the view that the Federal Reserve will continue to tighten aggressively.
The pound has slid 15% against the dollar this year as British inflation surges to double digits and growth grinds to a halt, with consumers and businesses hit by soaring energy prices.
Truss is set to announce plans tomorrow to help households cope with the surge in gas and electricity bills caused by Russia’s invasion of Ukraine. Some financial analysts have put the cost of Truss’s reported plan to freeze power tariffs at 100 billion pounds or higher, on top of her 30 billion pounds of tax cut promises.
Analysts said gains for sterling because of Truss’s plans were not certain, with questions remaining over how they would gel with the Bank of England’s tightening monetary policy.