Wednesday, 17 August, 2022

Pound slides to two-year low against the dollar

Pound slides to two-year low against the dollar

The pound has fallen to a two-year low against the dollar reflecting traders' increasing concerns about recession around the world as energy prices continue to soar.

But sterling is also weak because markets are worried about future UK economic growth, analysts said.

Sterling could fall even further after predictions of economic stagnation and as inflation rises, they added.

London shares regained some ground on Wednesday following Tuesday's falls.

The resignation of two senior government ministers on Tuesday evening, including former Chancellor Rishi Sunak, was not a significant factor in the pound's fall, Rabobank head currency strategist Jane Foley told the BBC Radio 4 Today programme.

On Tuesday the pound fell below $1.19 for the first time since March 2020, when the first UK Covid lockdown was brought in.

The pound to dollar rate was flat on Wednesday, while markets rose in London and Europe, with some analysts saying they were resetting to a lower level.