The pound has plummeted to its lowest level against the dollar since 1985 amid concerns about Liz Truss’s £150 billion package of energy support.
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.
At the time of writing it stands at $1.1410, the lowest level since Margaret Thatcher was in power and since Ronald Reagan’s tax cuts in the United States, The Times reports.
Value of the pound against the dollar as at 16:00 GMT, Sept 7th (source: Refinitiv)
Economists said that the fall in the value of sterling had been caused in part by concerns about Truss’s plans to freeze energy bills for both households and businesses. She plans to freeze household bills at about £2,500 and cap energy costs for businesses. She is planning to fund this policy, which is expected to cost more than £150 billion, from general taxation. There are also concerns about a growing trade deficit.
Sir Keir Starmer, the Labour leader, accused the new prime minister of protecting energy companies and their “vast profits” after she ruled out imposing a further windfall tax in her first prime minister’s questions.
She argued that extending the present windfall tax would deter investment. “The reality is this country will not be able to tax its way to growth,” she said.
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