UK Deputy Minister Downplays Pound Plunge

UK Treasury Deputy Chancellor Chris Philp downplayed the historic decline in the British pound and government bonds, saying yields were about the same as in the US. Reuters reported.

The pound fell to $1.09 yesterday – down 3.6 per cent – after the British government unveiled a new economic growth plan that has unsettled international investors.

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It ranked at its lowest against the dollar in 37 years, after the British currency suffered its worst day and words from UK Prime Minister Kwasi Kwarteng sent markets tumbling.

‘the same’

“Let’s be clear, government interest rates are about the same as they are in the US,” Philp said. “When you talk about the dollar, the currency has proven very strong against the euro and the yen, for example.”

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The pound has fallen as much as 11 percent in the past three months, making it the worst-performing major currency. Against the euro, the pound also hit its all-time low since January 2021.

Minister Kwarteng will cut taxes to boost the economy again. This includes income tax and house purchase tax. There will also be energy subsidies for households to reduce gas and electricity bills, costing the UK €60 billion.