Section:GDN 1N PaGe:14 Edition Date:190731 Edition:01 Zone: Sent at 30/7/2019 20:59 cYanmaGentaYellowb
- The Guardian Wednesday 31 July 2019
(^14) National
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Page 30
Pound dives again
against euro and
dollar as markets
fear no-deal impact
Richard Partington
Economics correspondent
The pound has faced renewed selling
pressure amid rising fears that Boris
Johnson could take Britain out of the
EU without a deal, raising the pros-
pect of rising prices for consumers and
hitting holidaymakers in the pocket.
Sterling continued to slide on the
foreign exchanges yesterday after
tumbling the most in a single day since
November on Monday, taking the cur-
rency to the lowest level for 28 months.
The pound fell 0.5% against the US
dollar and the euro , taking it to $1.2 2
and €1.09 on the money markets.
However, there were reports of sterling
being off ered at parity with the euro at
bureaux de change at major airports,
with some customers at Heathrow
off ered less than one euro per pound.
Neil Wilson, the chief market ana-
lyst at Markets.com, said sterling was
facing “relentless selling pressure ”,
adding: “The reasons behind the
slide are well trodden but worth not-
ing again: increased risk of a no-deal
Brexit as the new government regime
pivots squarely towards making no
deal a reality.”
Sterling has had its worst month
since October 2016, losing 4.3% so far
in July, with the pound the worst-per-
forming major currency in the world
since Johnson entered Downing Street
last week.
Visiting Wales yesterday, the new
prime minister said the government
does not comment on the currency.
As a newspaper columnist in the
2008 fi nancial crisis, Johnson had
said a falling pound was a symbol of
“ national humiliation ” as he attacked
Labour’s economic policies under Gor-
don Brown.
As the pound continued to slide
on the foreign exchanges, econo-
mists warned infl ation could rise as
a consequence, pushing up the cost
of living for UK consumers. When
the pound falls, infl ation goes up as
importing goods to Britain becomes
more expensive.
Victoria Clarke, an economist at the
City bank Investec, said: “If we look
back to the sharp drop in the pound
after the Brexit referendum, there
were some pretty sizeable conse-
quences for infl ation down the line. It
was material and squeezed household
cash positions quite signifi cantly.”
When the pound plunged straight
€1.
The value of the euro against the
pound yesterday. Airport bureaux
de change were off ering just one euro
$1.2 2
The dollar rate, also down 0.5%.
There are concerns i t could break
the record low of $1.05 from 1985
onal
or all
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be
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