Pound performing a bounce. Overview for 06.09.2022
The British pound against the USD has been trying to recover for two days in a row. The current quote is 1.1597.
The main political intrigue of the month finally came to its ending: Liz Truss became the new Prime Minister of Great Britain. She is simultaneously the head of the Conservative Party. In fact, this is not the easiest choice for Britain, but let us see how things go.
Well, Truss has made the first step at least. She presented a plan by which electricity tariffs would be frozen until 2024. In October, they must have grown by 80% already, but now by Prime Minister's strategy, annual growth of prices for gas and electricity will be held back.
In the perspective of the nearest 18 months, this might cost the economy 130 billion GBP (150 billion USD).
Anyway, market reactions to Truss's initiative were positive. The pound managed to bounce off the local lows.
Clearly, this support will not solve the problems per se. However, it will lift some of the financial load off the British and might cool down the society.
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