UK: Pound Falls to Record Low Against US Dollar

Photo: Bloomberg [via telegraph]

The Facts

  • The British pound slumped to an all time low against the US dollar on Monday, falling almost 5pc overnight to $1.0327. It later leveled out at $1.05 - around 2.9pc below the previous session's close.

  • The nadir came after Chancellor Kwasi Kwarteng said on Sunday that there were "more [tax cuts] to come," following a £45bn tax cut package that was announced by Kwarteng on Friday.

The Spin

Left narrative

Chancellor Kwarteng and Prime Minister Liz Truss are recklessly gambling with the UK's finances. Their plans rely on trickle-down economics, a method which has been tried time and time again and repeatedly proved ineffective. The only thing these incompetent politicians will succeed in is making the rich richer and the poor poorer.

Right narrative

Kwarteng's tax cuts are part of a comprehensive and bold plan to revive the UK's stagnant economy. While it may seem like these programs will favor higher earners, the measures will stimulate the economy at large by incentivizing businesses to invest - something which will strengthen the nation's finances and help those at all income levels in the UK.

Nerd narrative

There is a 50% chance that the UK's annual inflation rate will be at least 5.9% by 2023, according to the Metaculus prediction community.

Political split



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