Pound-Dollar parity now a one-in-four chance

[sunnydaytoday0]

Anyone else worried about implications of the continual slide in the value of the pound against the dollar on our economy? I know the dollar is strong at the moment, but sterling fell sharply on Friday after the mini budget losing another 3% of its value to a 37-year low. Asian markets have opened and it's now below $1.0770, down about 0.8% from Friday. Sterling's all time-low is around $1.05. According to Bloomberg there's a 1 in 4 chance parity will be reached within 6 months.

It's not just going to be much more expensive going to the states but a lot of our imports will become even more expensive, including fuel, foods, cars etc.

Is this just something we will now have to suck up and accept as an effect of the government's fiscal policy - trying to finance such huge national borrowing amidst our deteriorating economic backdrop?

Yes, it's very worrying, feels like we are spiraling down the plug hole a times.

Boo bloody hoo

If you put clowns in charge of a country you can expect chaos to ensue

They are looting while they can and are telling us to our faces what they're doing. Literally everyone is standing around and watching

Ummm...

A big fall against the Euro too in the last few days.

"Is this just something we will now have to suck up and accept as an effect of the government's fiscal policy"

Well our options are limited to protesting against their reckless policies until we can vote them out.

But for everyone who thinks that swathes of unfunded tax cuts are irresponsible, there's someone else delighted to see more money in their pay packet and they don't understand or don't care about the wider implications.

Hold on to your hats because the next 6 months will be much, much worse.

When the Fed keeps hiking rates aggressively, the pound will crash even further.

Only way to defend the pound is to raise rates quickly in the UK.

The market is pricing in a 5% base rate AND 5% inflation (break even rate) in the UK by the end of 2023.

There is no chance of the UK economy coming through that without a serious recession.

Indeed. I've seen people cheering online that there will have to be reductions to the state due to this budget. These guys (and the people that voted for them) want a small state.

Expect cuts to the NHS, policing, councils. They will frame it as essential due to the ridiculous debt we now have

If you thought things were bad before then buckle up

There is no chance of the UK economy coming through that without a serious recession.

Well of course.

Watch the Tories tank the last election before the UK goes right down the toilet so they can blame Labour and regain ground at the next. Party of fiscal responsibility, my arse.

Sterling fell through the floor the day the EU referendum results were announced (24 June 2016) and has never recovered because the UK government has not said anything sensible about the UK's relationship with its closest neighbours since. This is the fault of the Conservatives, but not of Truss particularly; she opposed the UK leaving the EU and the UK leaving the European Single Market. She's responsible for the last few weeks of this bullshit, but not for most of it.

I am nodding along to this.

As @GreenLunchBox says, it has in past few hours been at $1.03, then back up slightly to $1.05. The BBC has just caught up.

Using midmarket rates, the lowest ever GBP to USD rate at market close was £1.00 to $1.054 on 25th Feb 1985. We could be in for an historic first any day now.

Isn't that to be expected or else people would just buy euros and use them buy dollars then convert them back into pounds and make a lot of money?

The pound would have to fall against everything or else currency traders would exploit any anomalies?

They probably do this anyway over time, but if you could do it in the short term without any risk we'd all be doing it.

Yes, I agree very poor sign of things to come for the U.K. economy.

Emergency Interest Rate incoming over the next week, those that have loaded up on cheap debt and maxed out on mortgages I'd be worried, it's going to get quite rough over next 6 months or so

Happening to a lot of key global currencies, the Euro and Dollar were at parity too, really shocking to see. Not just happening to Europe either, Japanese Yen is the weakest I’ve ever seen (good time to see Japan, they will open up soon) and the Yuan dropped too.

There was be those (1%) who will benefit (get richer) from the crashing ££

Of course, traditionally it’s not good for the US to have a strong dollar vis a vis other currencies but this could be a way to export inflation. It’s an odd trend for sure though. European currencies at near parity is not good for the EU when energy commodities are priced in dollars though … East Asia could benefit though

Oh dear. This isn’t looking very good.

I woke this morning to news of the pound dropping to its lowest level since 1971 and the very real possibility that a far right coalition has won the election in Italy.

Happy Monday everyone.

Yet people will still continue to vote Tory....

Liz Truss and her going for growth plans have sunk spectacularly very quickly.

Christ I had no idea about the importance of pound-dollar parity before the last few days (I wish there was an economics guide for idiots that I could get hold of..)

A lot of stuff related to currency goes over my head, but this - obviously - looks like a very bad sign of what’s to come.

i follow the news very closely, but feel quite ignorant about the actual implications of economic news on members of the public. Can anyone recommend any news sources that break down news on the economy in clear and understandable bits (e.g. The Economist, maybe?)

Apart from the serious risk of us having a very bad recession, food/fuel prices going up and trips and imports to/from the USA being more expensive, what other risks will come out from this too?

Sorry for sounding ignorant - I am quite ignorant on this, but keen to learn!

Including many Tory MPs who apparently are in hedge funds betting on a falling pound.

Including many Tory MPs who apparently are in hedge funds betting on a falling pound

A few dozen Tories will have made an absolute killing on this. The other 67 million of us are about to get a lot poorer. This is what you get when you vote for charlatans, chancers and fools.

#shortingthepound

This.

Wake up you idiots who vote tory