Pound fell to weakest since 2010, as Exchequer Chancellor warns of global threats
The pound drop to its weakest since June 2010 as Chancellor of the Exchequer George Osborne warns of a cocktail of threats against the British economy in 2016.
According to Bloomberg News, the sterling fell by 0.4 percent to only $1.4575 9 am January 7 London time reaching $1.4561. Meanwhile, the UK currency went down 0.8 percent to only 74.26 pence per euro.
The Exchange Rates reported that the Pound Sterling to euro exchange rate on January 7 declined Tuesday even with the better-than-expected construction PMI. The British manufacturing output was lower than what was projected in December, while the pound to euro exchange rate weakened. Hong Leong Bank analysts expect the Pound Sterling to be bearish as the US Dollar strengthens.
Meanwhile, the British Chancellor of the Exchequer warned Thursday that the country's economy faces a "dangerous cocktail of new threats" this year. He recommended tightening public spending, according to Yahoo.
"We are only seven days into the New Year, and already we've had worrying news about stock market falls around the world, the slowdown in China, deep problems in Brazil and in Russia," according to a pre-released copy of Osborne's remark. "Last year was the worst for global growth since the crash and this year opens with a dangerous cocktail of new threats."
These comments follow a sell-off on financial markets, as Chinese stocks drops due to the country's economic slowdown.
Osborne has implemented austerity policies aimed at cutting the country's budget deficit ever since he became Britain's chancellor in 2010. He is a strong candidate to succeed Conservative Prime Minister David Cameron. Britain may have a better growth rate compared to its sluggish European neighbours, but Osborne fears that complacency may make the country vulnerable to risks abroad.
He underlines the importance of "fixing public finances," especially with the record low oil prices that could lead to trouble for giant energy firms.