Sterling currency crisis looms: Can the Bank of England steady the ship?

Industry split on sterling outlook

Valeria Martinez
clock • 5 min read

What was once a story about the pound depreciating due to a growing Fed-Bank of England policy divergence might have evolved into the early stages of a currency crisis, industry experts argue, as pressure for the UK central bank to hike rates mounts.

New chancellor Kwasi Kwarteng's £45bn package of tax cuts, the largest since 1972, was designed to boost the economy but instead spooked investors, who fear the government will run up public borrowing to unsustainable levels.  As trading opened in Asian markets on Monday (26 September), the pound slumped to a record low against the dollar amid fears the fiscal policies unveiled in the government's Mini Budget would worsen inflation and threaten public finances. Gordon Shannon, portfolio manager at TwentyFour Asset Management, said that while the pound's weakness is already well beyond...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week


More on Currencies

Four Graphs explaining sterling

Four Graphs explaining sterling

Four experts write

Investment Week
clock 09 January 2024 • 3 min read
BoE's Jon Cunliffe: Digital pound likely needed by 'end of the decade'

BoE's Jon Cunliffe: Digital pound likely needed by 'end of the decade'

Concerns around privacy remain

Cristian Angeloni
clock 27 October 2023 • 3 min read
Four Graphs explaining currencies

Four Graphs explaining currencies

Four experts write

clock 25 October 2023 • 2 min read