U.K. inflation is running at the fastest pace since the early 1980s.
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The British pound on Wednesday plummeted to its lowest level against the U.S. dollar since 1985.
Sterling fell to $1.1407 in afternoon trade in London — a level not seen in 37 years — as investors responded to the U.K.’s darkening economic landscape with a new prime minister at the helm.
It was last seen trading down 0.4% at $1.1452.
British Prime Minister Liz Truss was officially appointed Tuesday after succeeding Boris Johnson in a closely fought leadership contest. She inherits an economy in the throes of its worst cost-of-living crisis in a generation, with inflation hitting 10.1% in July.
The pound dropped to $1.1444 in the hours following her victory Monday, but it has since slipped lower as traders comprehend the fallout from her appointment.
The last time sterling fell to $1.14 was briefly during the Covid-19 pandemic low in March 2020 and the Brexit result in 2016. However, the level of $1.1407 has not been seen since 1985, under Margaret Thatcher’s government.
The lowest level sterling has traded against the greenback was $1.052 on Feb. 26, 1985, according to Refinitiv data.
Source link: https://www.cnbc.com/2022/09/07/british-pound-falls-to-its-lowest-level-against-the-dollar-since-1985.html