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ARCHIVED - GBP drops 1.5 per cent against the Euro
This Monday, the pound has plunged to its worst level against the dollar since 1971
The value of the British pound (GBP) has plummeted this Monday September 26 to values not seen since 1971 in its exchange rate against the dollar.
The UK currency lost 2.09% against the dollar, so that £1 is worth $1.0568, while it fell 1.54% against the Euro to €1.0971 and 1.82% against the yen to 152.0895 yen at the open on Monday.
However, at the opening of the Asian market, the Pound Sterling had already fallen against the dollar by almost 5% to $1.0327 before recovering some of its value.
After an announcement last Friday by the new UK government of PM Liz Truss that they would introduce a new £45 billion tax cut programme, the pound fell to a low not seen since 1985.
This will be a devastating blow for many expats who have retired to Spain and who claim a UK pension, as these have effectively decreased in Euro value by about 5% as of Tuesday September 27.
The UK government made this decision in their ‘mini-budget’ in an effort to boost the economy and tackle the rising cost of living, especially in energy, by cutting the top income tax bracket from 45% to 40% and raising corporation tax, among other measures.
Hours before that was announced the tax cut, the Bank of England had decided to raise the base rate by half a percentage point to 2.25%, in order to tackle inflation, which currently stands at 9.9% – which is still lower than the level of inflation in Spain, which is currently over 10%.
Image: Archive
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