The pound fell to a record low under $1.04 as the global wave of selling over the UK currency continued. The FTSE 100 lost the 7000-point mark and was unable to sustain a modest rally in opening trade, although export stocks stayed in demand and offset the overall decline.
Sterling’s plight intensified during Asian trade, leaving London traders looking at levels last touched in the 1970s at the start of the European day, when talk in the City of a potential emergency interest rate rise from the Bank of England added to the uneasy mood.
Concern across international markets about the implications of Kwasi Kwarteng’s tax-slashing mini budget, especially for the UK’s public finances, continued to set the tone to trade. Economists have warned the impact for inflation could result in rates having to stay higher for longer.
