TIMES.KY

Cayman Islands, Caribbeanand International News
Thursday, Mar 28, 2024

Pound falls to lowest level since COVID crash after Nicola Sturgeon claims 'mandate' for Scottish independence referendum

Pound falls to lowest level since COVID crash after Nicola Sturgeon claims 'mandate' for Scottish independence referendum

"The UK has huge imported energy inflation and it is getting hit on both sides - from oil prices going up and sterling weakening," says Fahad Kamal, chief investment officer at Kleinwort Hambros.

The pound has fallen to its lowest level against the dollar since the onset of the pandemic, fuelled by concerns about the economy and the prospect of a second Scottish independence referendum.

Scotland's First Minister Nicola Sturgeon said earlier that her government had an "indisputable mandate" for another vote and was ready to set out more details of how this could be achieved without the approval of the UK government.

Sterling dropped below $1.20 for the first time since March 2020 - a drop of more than 1.2% on Tuesday.

When compared with the euro, the pound slumped 1.2% to 86.81p, its lowest point since last May.

"If I were to isolate the move lower down to one event, I'd most probably say that the Scottish independence risk was the straw that broke the camel's back," said Simon Harvey, head of FX analysis at Monex Europe.

Since the beginning of the year, sterling has fallen more than 11% with much of that decline attributable to a strong dollar - a safe haven for global investors in times of economic shock.

However, concerns about UK growth - tipped to be weaker over the coming months than in most rich countries - has added to the gloom for the currency.

There is added uncertainty about how fast the Bank of England can increase interest rates - which is needed to control soaring inflation - without causing economic damage.

Fahad Kamal, chief investment officer at Kleinwort Hambros, said the possibility of a new Scottish independence vote was "really bad news across a number of things".

"The UK has huge imported energy inflation and it is getting hit on both sides - from oil prices going up and sterling weakening," he said.

"It is putting Britain on a dangerous inflation trajectory and there is very little the Bank of England can do."

Typically, a fall in the value of sterling makes imports even more expensive, potentially contributing to inflation further.

Data released by the Office for National Statistics earlier this week unexpectedly showed that the UK economy contracted by 0.3% in April.

Newsletter

Related Articles

TIMES.KY
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×