The British pound has resumed a slide against the US dollar after Britain’s new government outlined plans to cut taxes and boost spending, reports Aljazeera.
On Monday morning, the pound fell by as much as five percent against the dollar at one point touching $1.0327, its weakest at least since the introduction of decimalisation in the early 1970s.
The government’s tax-cut plan has sparked concerns that increased public borrowing will worsen the nation’s cost-of-living crisis.This is British currency’s biggest drop against the US dollar since March 18, 2020, when then-Prime Minister Boris Johnson announced the first nationwide lockdown to control the spread of COVID-19.
It closed at $1.0822 in London on Friday, from $1.1255 on Thursday.
British PM Liz Truss, who took office less than three weeks ago, is racing to combat inflation, which is at a nearly 40-year high of 9.9 percent, and head off a prolonged recession. Facing a general election in two years, she needs to deliver results quickly.
Treasury chief Kwasi Kwarteng recently announced sweeping tax cuts he said would boost economic growth and generate increased revenue without introducing corresponding spending reductions.
He also said previously announced plans to cap soaring energy bills for homes and businesses would be financed through borrowing.
Bd-pratidin English/Tanvir Raihan
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