The GBP dropped to a record low against the American Dollar this week, accompanying rising inflation amongst rising living cost in the UK.
The downwards trajectory of the GBP next to the American Dollar began in 2016 when the U.K voted to leave the European Union and gave the go-ahead to the Conservative-proposed Brexit. The loss of the country’s longest ruling monarch - Queen Elizabeth II, directly contributed to the decrease in value of the pound.
On Monday, the pound fell to $1.03, the lowest it has ever been, before rising to $1.07. Some speculate the declining to be also caused by the new prime minister, Liz Truss and her proposal, considering an increase in government borrowing to compensate for tax cuts, striking investors to be wary of her plan. It’s unsure whether the outcome of this proposal would be prosperous or quite the opposite. Would it lead to higher tax revenue and an increase of economic activity? Or higher budget deficit and an increase in inflation?
The UK is tunnelling its way to an inevitable recession, with economic prosperity for the common man being at its lowest.
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