Page 24 - Oct 2022

Pound Hit s All-Time Low Against Dollar

According to Reuters, the pound sterling crashed almost 5% on September
26th to hit $1.0327. This is its lowest rate against the dollar since
decimalization in 1971 and follows an earlier drop of 3.61% after Britain?s
new finance minister Kwasi Karteng announced historic tax cuts funded by
massive state borrowing. The action was taken in an attempt to put the
brakes on runaway inflation in the UK.

Borrowing includes $78 billion coming in just the next six months. Prime
Minister Liz Truss, asked to form a government not yet three weeks ago by
the Queen Elizabeth II in her last official act of a 70 year reign as Britain's
longest serving monarch, has taken notable criticism for launching this
bold plan just a day after the central bank hiked interest rates.

Market strategist Marc Chandler described the plunge as ?incredible? and
predicted an emergency Bank of England meeting. The Tories responded
by gathering up "loss of confidence" letters from their side of the aisle.
Beer manufactures warned that the shrinking pound, combined with
inflation, would likely result in beer prices surging upward.

For average folks, the price of a pint is easier to understand than the GDP.
There is good news if you are an American buying auto parts coming
Britain. They are about to become cheaper, although no easier to find for
some models. Lower costs for things that can not be found, regardless of
price, remains problematic.

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