British Pound Sterling hits new low as finance minister quits

Rishi Sunak quits

Rishi Sunak quits

British Sterling plunged to a new March 2020 low against the dollar on Tuesday, extending losses after the resignation of finance minister Rishi Sunak.

The resignation, along with that of the health minister, Sajid Javid threw Prime Minister Boris Johnson’s government into a crisis.

Javid said he had lost confidence in Johnson’s ability to govern in the national interest.

The pound touched a low of $1.189 and by 1750 GMT stood at $1.193 , down 1.4% on the day.

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Meanwhile the Bank of England warned on Tuesday that the economic prospects for Britain and the world had darkened since the start of the year and told banks to ramp up capital buffers to ensure they could weather the storm.

International institutions, such as the International Monetary Fund and OECD say Britain is more susceptible to recession and persistently high inflation than other Western economies, which are all grappling with global energy and commodity market shocks.

“The global economic outlook has deteriorated markedly. Global financial conditions as a whole have tightened significantly,” Bank of England Governor Andrew Bailey told a news conference after the BoE published its half-yearly Financial Stability Report (FSR).

Developments around the war in Ukraine would also be key, the BoE added.

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