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?

A lot of conspiracy theories here but the GBP probably couldn’t have avoided what is happening to most other global currencies for much longer. All currencies that matter are dropping HARD against the USD and there’s no good explanation for it.

Latin American currencies, oddly enough, have been immune to this effect … so far.

Feels like a tsunami is building up with the USD, very scary

We are down against the Euro.

I just started a thread on this as didn’t see this one- blank Monday incoming

I mean BLACK Monday!

We need an big emergency rate rise. Come on Boe you bottled it last meeting, 1% at least.

Yes, it's very concerning.
The BOE may attempt an emergency rate hike to try to prevent it falling further although that may not work.
I wonder who the government think is keen to fund their wonderful plan to cut taxes for the wealthy.

Bloody terrifying. Can we stop castigating Tory voters? They must be as worried about this as anyone else. However misguided I might think they were in 2019, this isn’t what they voted for.

@MrsTerryPratchett

exactly

@FreddyHG they’ll have no choice but to hike this week. It’s an absolute crisis

I’ve got a holiday to the US in a few months as well. Think I’m going to have to allocate some more spending money!

Agree. Nobody voted for this.

Absolutely right. Tory voters voted for a Boris government. Arguably you could blame those on here who bought Boris down. Is this a better option? I actually supported Boris till the end because the alternative is so awful. We only had to put up with the bumbling buffoon for 2 more years no we have something much more serious.

Not just stuff from the US , lots of things are paid for in dollars
The trade i'm in imports from China and pays in US dollars

A weak pound makes a cost of living crisis much worse. This mini budget has been a full blown disaster.

Johnson was never going to last another two years. Truss won’t either. By the spring when we’re in the depths of the worst recession in living memory her position will be completely untenable.

WTF ???

This crisis is self inflicted, Kwarteng caused this & base rate rises wont change the trajectory, once the markets lose faith in UK's economy and its ability to pay honour debt, that its, no one pours water into a leaky bucket, expect inflation over 20% and double digit interest rates - unless he changes course and reverses his borrowing, both on tax cuts and the crazy energy relief scheme.

The Tories won't though, because this policy isn't about growth or UK plc, its a reckless attempt to win the next GE, an all in bet the house.

Kwarteng/UK, as Kenneth Clarke said, is behaving like a South American economy and that never has ended well, George Osbourne said you cannot fund tax cuts with borrowing.

Wait till we all see govt bond yields, later this morning, they've gone from 0.5% to 4% on Friday.

Answer = stop voting tory!!

Like bloody turkeys voting for christmas, honestly.

Trust me, 'city types' are not profiting from this!!! People are losing millions hand over fist. It's a cabinet of utter incompetents, taking over from a populist administration who deceived the most desperate in society with a slick media campaign and Dominic Cummings' carefully- crafted slogans. But this is what people voted for to "Take Back Control." This government have ruined the country. We might have to leave.

The implications of this are going to be disastrous unless something is done to reverse the damage. Parity with the Dollar will mean everything just becomes ever more expensive to import = higher prices for all. The Euro exchange has also fallen too from 1.14 to 1.10. Cost of living just went up even more.

We buy oil in US dollars
Oil is used to make petrol

So just imagine what the price of petrol could be...

Personally I’ve given up caring. One of my friends voted Brexit and Tory in 2019. She was complaining about the state of the country over the weekend and really can’t see the link between how she voted and the situation we’re in now.

As much as the budget was about giving money to wealthy folk, the hard truth is we’re out of options as a country. Capital and skilled people have been fleeing the country since Brexit. Although many of you hate bankers, they were a sizeable percentage of our tax base. Cash in hand tradesmen,fishermen and Wetherspoons can’t replace that. The red wall areas will not replace London as an economic powerhouse because they are not as productive so we need to kick start the engine again. Feelings will be hurt by my saying this but it’s a truth backed up by data. The Tories can now see what Brexit has done and therefore Kwarteng had to do something hence begging wealthy folk and foreigners to stay/come to U.K. It’s a fucking mess.

There will be posters along in a minute to tell us how they simply have no choice but to vote Tory because they know what a woman is despite Penny Maudant calling Transwomen women and Truss scrapping the word ‘women’ from her title when she was equalities minister.

These people need to feel real pain so they understand the impact their vote has.

I thought the Conservatives were supposed to be good with the economy ?

You could write what I know about economics on the back of a fag packet, but watching the business news at 5am this morning, nobody who does know about economics and how the markets work, seemed to be saying that the Governments fiscal policy was a winner.

@Endlesssummer2022

So instead of mitigating Brexit, he then sets about making matters even worse?

The wealthy aren't going to want to stay here and see their standard of living and buying power vanish as the £ falls, more wealthy will leave and less will come here, inc lower paid workers who have effectively seen the value of their 30k wage fall in value too.

No, this isn't about the uk or the economy or the cost of living, its about the next GE.

Well that’s one way to tackle a cost of living crisis

No wonder Starmer looks so happy at the Labour party conference - he knows that Truss has scored a massive own goal by doing this. There is no way she will be voted in at the next election.