Sterling suffered a sharp fall hours after Chancellor Kwasi Kwarteng presented his mini-budget to the House of Commons on Friday. Sky's EdConwaySky gives his analysis 👇
had the right kinds of reforms, but what matters even more than any of that is being able to borrow all that money, which in turn comes back to those international capital markets.
The fall in the pound is perhaps more worrying. Don't get me wrong: we have had plenty of tough days for sterling before, and this is nothing in comparison with the night of the EU Referendum.And indeed, in the coming days sterling may well rally and things will look a little less depressing. If those investors were excited about Britain's growth plan you'd expect them to want to be a part of it; you'd expect them to begin allocating cash to UK investments; instead the opposite seems to be happening.The verdict, in short, is not especially encouraging. No other budget in modern times has seen a reaction quite like this. Perhaps the closest analogy is the budget this one has already been compared to: Anthony Barber's 1972 budget.
Indeed, you could make the case that today's fall in sterling is a mark of success: when times change, our currency adjusts to it. And another difference is that the Treasury no longer decides interest rates; those get set on the other side of town by the independent Bank of England.
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