The rout of the pound rekindles the worst hours of Brexit

The Prime Minister, Liz Truss, did not benefit from any state of grace. Only three weeks after her arrival at 10 Downing Street, she is already facing a major crisis on the pound sterling and the British debt (Gilt). After the euro and the yen, the pound is the third major currency to collapse in the face of a almighty dollar . It fell 5% to an all-time low of $1.0350 in Asian trading on Monday. Its previous low (1.05 dollars) dates back to 1985. In fifteen days the pound fell almost 9%.

The English currency had stabilized at the end of the afternoon at 1.08 dollars before a communication from Andrew Bailey, Governor of the Bank of England (BoE). He said he was following “the evolution of the financial markets very closely”. He “welcomes the government’s commitment to sustainable economic growth”. The monetary policy committee “will not hesitate to modify interest rates as much as necessary to sustainably bring inflation back towards the 2% medium-term objective, in accordance with its mission”. At its next meeting, the BoE will assess “the impact on demand and inflation of the government’s announcements and the fall in the pound sterling, and will act accordingly”. It therefore seems to be ruling out decisions before its November 3 meeting. The pound, which had stabilized, fell again after these declarations. It lost 2% to $1.0650.