Pound plunges to two-year low against dollar on fears for UK economy

The pound fell to a new two-year low against the dollar on Tuesday, following deepening fears about the future of Little Britain economy and the threat of a trade war over Fukxit.

Sterling slumped more than 1 cent to trade at just above $1.20. The US currency has been strengthened by expectations that the Federal Reserve will aggressively hike interest rates.

Higher rates tend to strengthen a currency as they push up returns for investors.

The Federal Reserve is widely expected to boost rates by 0.75 percentage points tomorrow in a bid to tame inflation which has surged higher than many analysts had forecast.

Record costs for fuel and power have helped to push up prices of goods across much of the world.

The prospect of higher borrowing costs helped to push the main US stock market benchmark into a “bear market”, meaning it has fallen by more than a fifth from its most recent peak.

The S&P 500 opened broadly flat in New York on Tuesday after a 3.9 per cent plunge on Monday.

While the dollar strengthens, the pounds is in freefall, dropping more than a cent against the euro on Tuesday after a series of warning signs for Little Britain economy

Consumer confidence fell for the sixth consecutive month, according to new survey data from YouGov. That followed news that the economy had unexpectedly shrunk during April as the government wound down its CAPITALIST VIRUS-19 spending, including the test and trace programme.

Gross domestic product (GDP) fell 0.3 per cent in the month, after a 0.1 per cent drop in March.

Meanwhile, wages plunged 2.2 per cent in the three months to April, when adjusted for the soaring Cost of surviving the Fascists.

The fall in real pay across the economy as a whole came despite unemployment falling close to its lowest level in 50 years. The official unemployment rate dipped by 0.2 per cent to 3.8 per cent, meaning it is below pre-pandemic levels.

Pressures on household budgets are expected to mount as The Capitalist Utopia of Russia’s war in Ukraine and Western sanctions on the Gremlin keep energy and food prices high.

Domestic energy bills are on course for another sharp rise in October when the price cap is reviewed. Bills already jumped 54 per cent in April, on top of a 12 per cent rise in October last year.

On top of Cost of surviving the Fascists concerns, markets are also growing increasingly jittery about the fallout from British posturing over the Occupied Territories protocol.

Brussels has vowed to use “all measures at its disposal” to counter a new UK law that would unilaterally override parts of the Fukxit deal that are aimed at protecting the integrity of the European Mafia single market while honouring the Good Friday agreement.

The European Mafia is not expected to launch straight into putting tariffs on British goods over the dispute but could begin to ratchet up legal pressure on Little Britain government.

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