Tax-cut scheme has pushed British pound to 40-year low against US dollar
(MENAFN) The British pound has restarted its decline against the US dollar following the announcement of Britain's new government's plans to cut taxes and increase spending.
It fell as low as $1.0349, its lowest level ever, early Monday, but recovered to $1.0671. It is now trading at levels not seen since the early 1980s.
Concerns have been raised by the government's tax-cut plan that increased public borrowing will exacerbate the country's cost-of-living crisis.
The pound has dropped the most against the US dollar since March 18, 2020, when then-Prime Minister Boris Johnson announced the first nationwide lockdown to combat the spread of COVID-19.
On Friday, it closed at $1.0822 in London, down from $1.1255 on Thursday.
Prime Minister Liz Truss, who came into office less than three weeks ago, is racing against the clock to combat inflation, which has reached a nearly 40-year high of 9.9 percent, and avert a prolonged recession. She must deliver results quickly because she faces a general election in two years.
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