British pound falls to record low as UK assets sell off

“So the first option is for him to recalibrate his package, which is politically difficult but economically needed. The second option is for him to leave it to the Bank of England, in which case the Bank of England will have to attend an emergency meeting as they won’t meet again until November. But that in itself was not good for him. Think again of the prime minister’s foot on the gas pedal and the governor’s foot on the brakes when driving a car. It’s not a good idea to push the UK economy forward. “

YOU-NA PARK-HEGER, Currency Strategist, Commerzbank, Frankfurt:

” The minutes of the Bank of England meeting at the end of our ek made it clear that in the fight against inflation, the Bank of England is placing its hopes on fiscal policy. Measures such as an energy price cap, due to take effect in October, could dampen inflationary pressures, easing pressure on the Bank of England to fight inflation in a firmer fashion.

“However, the movements in the pound recorded on Friday, especially this morning, suggest that this will not be easy. The mini-budget presentation was very distasteful – the pound literally collapsed. The UK government’s announcement of massive tax cuts has caused money markets to worry about the finance minister as government debt rises.”

SAMY CHAR Chief Economist, Geneva LOMBARD ODIER: “It’s not like a currency crisis, a currency devaluation would make things worse. Considering Deficit and BoE uncertainty, sterling needs to depreciate land can, but at some point it will fall to a level where the prospect of attractive returns it creates improves the outlook for the economy and money flows.”

MICHAEL RABOBANK SINGAPORE

“The British decided to go back to 400 Steroids are the best way, apparently the market is just saying: ‘That’s not going to work,’ steroids.

“The market now sees the UK as an emerging market. They are not wrong in their policy response and naively believe that increasing demand rather than supply is the way to deal with supply-side shocks. ”

SHAFALI SACHDEV, Head of Fixed Income and Commodities Asia, BNP Paribas Wealth Management, Singapore

” saw a G Currency weakness turned into expectations of a rate hike. It makes you realise that the market is not very confident in the UK government’s ability to fund its fiscal plans. ” it’s math will imply that there is some price to pay, be it higher interest rates, or a weaker pound .. I guess the market is betting very carefully that this will be the truth.” PAUL MACKEL, HSBC GLOBAL FOREX RESEARCH director

” has been quite intense over the past two trading days.

“Usually you would think a very strong fiscal plan raising interest rate expectations should be good for the currency, but this time we didn’t see that. We see the exact opposite. ” what happened recently

hours or so, This is a strong reminder of how suddenly, the drivers of exchange rates can change.”

KIT JUCKES, Societe Generale Currency Strategy Director

“The market has a tendency to overextend and I wouldn’t over-interpret this morning’s decline.

” but there are two points. One is the loss of confidence in UK fiscal policy, which does not help the pound. The second is that a small budget makes the pound an option to bet against the dollar. ”

LEE HARDMAN, CURRENCY ANALYST, MUFG, LONDON “The huge market reaction to the UK government’s fiscal stimulus has sent a clear signal that market participants have lost confidence in the adequacy of UK domestic policy settings. “

PAUL DALES, Chief UK Economist, Capital Economics, London

“A further drop in the pound in early trade means we have now reached a point where the Bank of England needs to step in to regain the initiative. There are several ways to do this. “

“First, the Governor Bailey is likely to speak this morning to underscore the central bank’s commitment to its 2 percent inflation target and provide a clear signal that it intends to hike rates aggressively at its next policy meeting in early November. “ “If this is reconciled with the government’s message that it is committed to long-term fiscal discipline and will present a plan for how it intends to Keeping public debt steady after the fiscal frenzy, then it could ease some of the downward pressure on the pound. “400