Pound sterling hits record lows since mid-80s, and falling will likely continue

The British currency’s value against the dollar is still moving downwards, and has reached the levels last registered in the middle of the 1980s. Such a crush has provoked the discussions of the possible spiraling down, resulting in a possible undermining of credibility of British assets and a balance-of-payments crisis.

Experts don’t perceive the worst scenario as the most probable one, although they suggest that there’s a necessity for the pound to get cheaper for the investors to return. As said by Charles Diebel, the already cheap currency probably needs to become cheaper.

According to a forecast made by the International Monetary Fund, Great Britain is about to deal with a slower economic recovery combined with a stronger inflation in comparison with other countries’ situations during the following year.

The future rates of the pound sterling are now directly dependent on the international economic situation, and the results of Truss’s attempts to control the depth and length of recession will also have their impact.

The growing expansionism of fiscal policy additionally implies tightening of monetary policy as well. The interest rates are largely expected to be risen by the Bank of England, and there’s a belief among the investors that the rates will reach the record level of 4.3% by the beginning of next summer. Still, the pound sterling continues its decline.