Sterling hit a 37-year low on the first full day of prime minister Liz Truss’s leadership, at the same time as a rise in the cost of insuring against a UK government debt default.
The pound fell to its lowest since 1985 in the morning, at $1.1407 against the dollar and weaker than either after the Brexit referendum or the early weeks of the Covid-19 pandemic.
Meanwhile, the cost of insuring exposure to sovereign debt hit a high last seen in June 2020, five-year credit default swaps climbing to 0.27% from 0.25%.
Analysts said worries about the potential £150bn cost of an energy support package and the country’s ability to avoid recession have dented sentiment in the currency and bond markets.
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Independent
