GBP Under Pressure As Political Uncertainty Grows
Thursday 20th October 2022 – 11:11 (BST)
GBP remains under pressure following recent political turmoil at Downing Street. UK Prime Minister Liz Truss sacked her closest ally and chancellor last Friday because he could not run the economy. Yesterday it was turn of her home secretary as it was felt they were unable to keep secrets.
Truss now appears to be clinging on for political life in what could be one of the shortest prime ministerial tenures in British political history.
There also appears to be significant fractures within the Conservative party as a whole – with differing opinions on the best way to move forward. Tax cuts or tax hikes? Pension triple locks or break the manifesto? Legislate fracking or rely on existing energy sources?
And it’s against this backdrop that new chancellor, Jeremy Hunt, has the unenviable task of delivering his Halloween budget. Deliver too little and the markets could tumble, promise too much and expect political rebellion.
The continued uncertainty has hobbled any significant GBP recovery, along with data that showed UK inflation went up 10.1% in the 12 months to September. The Bank of England is now under increasing pressure to raise interest rates further to help cool the economy down.