Pound sterling registers lowest value against the dollar in 37 years | Economy

The pound sterling recorded this Wednesday (7) the lowest value against the dollar since 1985. The British currency was down 0.96% around 11:00 am ET, at $1.1409.

The pound has reached its lowest level in 37 years as it has been affected in recent weeks by fears of recession in the UK. The rise in inflation and the search for the US currency as a refuge value amidst the context of an accelerating global economy contributed to the market’s distrust.

Like many developed countries, the UK is experiencing a sharp rise in prices, but is particularly affected by natural gas. The war in Ukraine made the prices of the input rise in the international market and the country is highly dependent on this energy source.

  • Liz Truss takes over as new UK prime minister and promises to help families with the electricity bill
  • Euro renews lowest value against the dollar since 2002

This will be one of the challenges for the new prime minister, Liz Truss, to recover the British economy. She was sworn in this Tuesday (6) by Queen Elizabeth II in a castle of the Scottish royal family.

Truss was chosen by the country’s ruling Conservative Party to replace Boris Johnson, who resigned in July and officially stepped down this week.

The prime minister listed three initial priorities: giving an initial boost to economic growth by cutting taxes, helping families with electricity bills, and improving public health.

“I’m going to address the energy crisis this week to deal with the electricity bills,” Truss said in his inaugural address.

What is known is that it will struggle to convince the markets of the effectiveness of its measures to stimulate the economy. The plans are due to be announced on Thursday and could include freezing energy tariffs.

The possibility that the country will continue to take on debt to finance the measures, after record indebtedness due to the pandemic, makes British assets less attractive.

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