LONDON. KAZINFORM – The pound sterling has reached its lowest level against the dollar since 1985. At the auction on Thursday, the value of the official currency of Great Britain fell below $1.13 cents. The fall occurred against the backdrop of an increase in the base interest rate in the US on Wednesday. Since the beginning of the year, the British pound has fallen against the dollar by more than 17%. It is reported by MIA “Kazinform” with reference to euronews.
The pressure on the pound sterling is also exerted by the announcement of the interim budget in the UK scheduled for Friday. It, according to local media, will reflect Prime Minister Liz Truss’ campaign promises to cut taxes, as well as her plans to freeze electricity prices. All this, experts emphasize, could lead to a hole in the budget in the amount of 100 billion pounds in the coming years.
The central banks of European countries are tightening monetary policy in order to contain prices.
To keep inflation relatively low and stable, the Bank of England raised its base interest rate to 2.25%. The rate set by the monetary policy committee will be in effect until November 3.
The Swiss National Bank has carried out the largest ever increase in its key interest rate. It increased from minus 0.25% to 0.5%.
In August annual inflation in Switzerland was 3.5%. In the UK – almost 10%. In the EU countries that use the euro currency, inflation has exceeded 9%.