Thu. Mar 23rd, 2023

The pound’s fall to a record low against the dollar has drawn concern from the international press.

Spain’s El Pais said the tax cuts and financial support announced by Liz Truss’s government indicated “a level of indebtedness that the markets consider unsustainable” was inbound.

The report said markets were “counting on a possible extraordinary meeting of the Bank of England’s steering committee to assess further rate hikes”. Anticipation of a bank meeting reversed Monday’s fall.

Bloomberg News in the US reported that some British tourists were already fetching less than one dollar per pound despite sterling not reaching parity with the greenback even at its lowest dip.

The Australian Financial Review said sterling’s slide had “ignited foreign exchange chaos” and quoted offshore traders from Sydney-based Macquarie Group as saying “the new UK government has clearly gone too far this time, which is an extremeely rare spectacle for a developed market”.

The Wall Street Journal topped its homepage with the headline ‘Pound hits record low against dollar’. A second prominent story on the site told readers that Britain‘s five-year government bonds now yield more than Italy or Greece, two of the eurozone’s weakest members due to their high debt levels.

The New York Times also splashed on the pound’s plunge. The news site, which has the most digital subscribers of any in the English language, said the pound crashed with “investors fearing that British tax cuts would overstimmulate the country’s economy”.

In a story on the weakness of European currencies against the US dollar, Germany’s Frankfurter Allemeiner Zeitung, noted that the pound was its lowest level ever.

The paper noted that while the slump will make imports of US goods into Europe more expensive, British and European goods are “becoming cheaper in the rest of the world, which should have a positive effect on local companies and their sales”.

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