The pound fell against the dollar on Friday as new figures showed a gloomy picture for the UK economy.
Sterling slipped to $1.11, after rallying on Thursday as Prime Minister Liz Truss resigned.
It came as official figures showed government borrowing rose to its second highest September on record.
Meanwhile, people are shopping less than they did before the coronavirus pandemic, according to figures from the Office For National Statistics (ONS
Retail sales fell by more than expected last month, dropping 1.4% and continuing their slide from August, the official figures showed.
The pound’s latest slide comes after a period of volatile trading for the currency.
It plunged to a record low against the dollar last month, while government borrowing costs rose sharply in the aftermath of the mini-budget. Investors were spooked after the government promised huge tax cuts without saying how it would pay for them.
Jane Foley, a currency strategist at Rabobank, said political and economic uncertainty as well as the negative economic data was behind the pound’s sell-off on Friday.
“While sterling rallied yesterday on Truss’s resignation, I think investors have realised today that it’s not a guarantee that we’ll get a market-friendly outcome from the Conservative leadership contest.”
The Chancellor, Jeremy Hunt is due to announce plans for spending and tax on 31 October in his economic plan, which the Treasury confirmed was set to go ahead, although there are reports it could be delayed due to the leadership race.
Ms Foley said this uncertainty was also weighing on the pound.
“The longer the uncertainty continues, the worse it’s going to be for the markets.
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