The pound has come under renewed pressure at the end of a torrid week for the UK currency, falling to fresh 14-month lows against the dollar.
Sterling lost almost a cent, to stand just above $1.22 at one stage, on the back of higher support for the greenback after US employment data came in much stronger than expected.
It was seen as denting the prospects for US central bank rate cuts this year – a scenario that tends to be supportive of a domestic currency.
That has not been the case for the UK, however, which is also seeing the prospects for rate cuts this year slip away.
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The pound is on course to have lost more than 2% this week on the back of a growing crisis of confidence in the country’s economic prospects and the state of the public finances under Chancellor Rachel Reeves.
Financial markets now expect to see just one rate reduction by the Bank of England this year due to stubbornly high inflation and flatlining growth.
The main worry is that the UK is facing a slew of higher prices as businesses have warned they will pass on budget tax hikes from April at a time when a raft of other bills are also due to shoot up.
Corporate lobby groups have declared that firms will also cut investment, jobs and the pace of wage rises to help offset the higher costs from measures such as elevated employer national insurance contributions.
Water and council tax bills are also on course to rise by more than the rate of inflation.
And energy bills are set to rise further amid high demand for gas and weak storage levels Europe-wide.
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