HomeFinancial MarketsPound Near 37-Year Low as UK Inflation Soars

Pound Near 37-Year Low as UK Inflation Soars

The British pound traded at approximately $1.18 on Sunday, just four cents away from its lowest performance against the dollar in the last 37 years. With talk about UK inflation exceeding 18% in the next year, the Bank of England is forecasting a five-quarter recession starting later this year.

Geoff Yu, a senior currency strategist at Bank of New York Mellon Corp., is doubtful that the pound can spark a rebound in the near future. “Is there more downside? Yes, absolutely. Even if things improve, the sterling can’t return to where it was in the past at $1.40 or $1.45. That’s going to be very hard to achieve,” Yu observed.

Inflation has been at the center of this issue, having hit a 40-year high of 10.1% year-on-year last month. This has led to soaring prices, particularly energy costs, plunging half of UK households into energy poverty ahead of the coming winter months.

The upside of a weaker pound is that UK exporters have enjoyed a sales boom due to increased demand. Stocks have also remained stable, with the FTSE 100 Index gaining a slender 0.3% so far in August.

Marriott Projects Revenue Growth Amid Resilient Travel Demand

Marriott International forecasted on Wednesday that 3% to 6% growth in its annualized global revenue per available room for the two years ending 2025 as the...

Dollar and Stocks Steady as Bonds Ease From Record Highs

The U.S. dollar and stocks in New York stabilized on Wednesday, while U.S. Treasury Yields retreated from their 16-year high, easing pressure on the...

New Home Sales Plummet in August

Sales of new U.S. single-family homes plunged in August as the 30-year mortgage rate rose past 7%, thereby discouraging would-be buyers. According to data...