Pound pounded: Five reasons why it matters and what the implications are
The weekend gave the chancellor and colleagues a chance to provide more context for a statement that, with no spending plans or OBR forecast, included only one half of the balance sheet.
The intention is to deliver a faster growing economy that generates more tax revenue, which in turn can be used to service the debt incurred to pay for it. This interaction, between soaring government borrowing, record inflation and a weak currency has been termed a"doom loop", and it is a phrase heard on City trading floors on Monday morning.The falling pound is bad news for UK importers and anyone who trades in dollar commodities, which includes anyone planning on filling a car with petrol or diesel in the coming days. Oil is priced in dollars, which means it will get more expensive in real terms for UK consumers.
By contrast the FTSE 250, which is largely made up of domestic companies earning in sterling, was down slightly.Just as significant as the falling value of the pound is the trajectory of UK gilts - the bonds issued by the government when it wants to borrow money from the markets.
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