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| Pound sinks as UK economic uncertainty rises | Pound sinks as UK economic uncertainty rises |
| (32 minutes later) | |
| The pound fell against the dollar on Friday as new figures showed a gloomy picture for the UK economy. | The pound fell against the dollar on Friday as new figures showed a gloomy picture for the UK economy. |
| Sterling slipped below $1.11, after rallying on Thursday as Prime Minister Liz Truss resigned. | Sterling slipped below $1.11, after rallying on Thursday as Prime Minister Liz Truss resigned. |
| It came as official figures showed government borrowing rose to its second highest September on record. | It came as official figures showed government borrowing rose to its second highest September on record. |
| Meanwhile, people are shopping less than they did before the coronavirus pandemic, according to figures from the Office For National Statistics (ONS). | Meanwhile, people are shopping less than they did before the coronavirus pandemic, according to figures from the Office For National Statistics (ONS). |
| Retail sales fell by more than expected last month, dropping 1.4% and continuing their slide from August, the official figures showed. | |
| The pound's latest slide comes after a period of volatile trading for the currency. | The pound's latest slide comes after a period of volatile trading for the currency. |
| It plunged to a record low against the dollar last month, while government borrowing costs rose sharply in the aftermath of the mini-budget. Investors were spooked after the government promised huge tax cuts without saying how it would pay for them. | It plunged to a record low against the dollar last month, while government borrowing costs rose sharply in the aftermath of the mini-budget. Investors were spooked after the government promised huge tax cuts without saying how it would pay for them. |
| Jane Foley, a currency strategist at Rabobank, said political and economic uncertainty as well as the negative economic data was behind the pound's sell-off on Friday. | Jane Foley, a currency strategist at Rabobank, said political and economic uncertainty as well as the negative economic data was behind the pound's sell-off on Friday. |
| "While sterling rallied yesterday on Truss's resignation, I think investors have realised today that it's not a guarantee that we'll get a market-friendly outcome from the Conservative leadership contest." | "While sterling rallied yesterday on Truss's resignation, I think investors have realised today that it's not a guarantee that we'll get a market-friendly outcome from the Conservative leadership contest." |
| The Chancellor, Jeremy Hunt is due to announce plans for spending and tax on 31 October in his economic plan, which the Treasury confirmed was set to go ahead, although there are reports it could be delayed due to the leadership race. | The Chancellor, Jeremy Hunt is due to announce plans for spending and tax on 31 October in his economic plan, which the Treasury confirmed was set to go ahead, although there are reports it could be delayed due to the leadership race. |
| Ms Foley said this uncertainty was also weighing on the pound. | Ms Foley said this uncertainty was also weighing on the pound. |
| "The longer the uncertainty continues, the worse it's going to be for the markets. | "The longer the uncertainty continues, the worse it's going to be for the markets. |
| Why does a falling pound matter? | Why does a falling pound matter? |
| A fall in the value of the pound increases the price of goods and services imported into the UK from overseas - because when the pound is weak against the dollar or euro, for example, it costs more for companies in the UK to buy things such as food, raw materials or parts from abroad. | A fall in the value of the pound increases the price of goods and services imported into the UK from overseas - because when the pound is weak against the dollar or euro, for example, it costs more for companies in the UK to buy things such as food, raw materials or parts from abroad. |
| A weaker pound can push rising costs higher as well if companies choose to pass on higher prices to customers. For people planning a trip overseas, changes in the pound affect how far their money will go abroad. | A weaker pound can push rising costs higher as well if companies choose to pass on higher prices to customers. For people planning a trip overseas, changes in the pound affect how far their money will go abroad. |
| Five ways a falling pound could affect you | Five ways a falling pound could affect you |
| Shoppers buying less | Shoppers buying less |
| "Consumers are now buying less than before the pandemic," said Darren Morgan, from the Office for National Statistics (ONS) which released the figures, said. | "Consumers are now buying less than before the pandemic," said Darren Morgan, from the Office for National Statistics (ONS) which released the figures, said. |
| He added: "Retailers told us that the fall in September was partly because many stores were closed for the Queen's funeral, but also because of continued price pressures leading consumers to be careful about spending." | He added: "Retailers told us that the fall in September was partly because many stores were closed for the Queen's funeral, but also because of continued price pressures leading consumers to be careful about spending." |
| The cost of living crisis continues to squeeze household budgets, with prices rising faster than average wages. | The cost of living crisis continues to squeeze household budgets, with prices rising faster than average wages. |
| Have you limited your retail spending? | Have you limited your retail spending? |
| Email: haveyoursay@bbc.co.uk | Email: haveyoursay@bbc.co.uk |
| WhatsApp: +44 7756 165803 | WhatsApp: +44 7756 165803 |
| Tweet: @BBC_HaveYourSay | Tweet: @BBC_HaveYourSay |
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| Inflation - the rate at which UK prices rise - surged to 10.1% last month and is expected to climb further. | Inflation - the rate at which UK prices rise - surged to 10.1% last month and is expected to climb further. |
| Mr Morgan, director of economic statistics at the ONS, said all types of shops saw sales drop with food stores particularly hard hit. | Mr Morgan, director of economic statistics at the ONS, said all types of shops saw sales drop with food stores particularly hard hit. |
| Energy bills | Energy bills |
| The UK is borrowing billions of pounds to limit energy bill rises for households and businesses. | The UK is borrowing billions of pounds to limit energy bill rises for households and businesses. |
| Borrowing - the difference between spending and tax income - was £20bn last month, up £2.2bn from a year earlier, the Office for National Statistics (ONS) said. | Borrowing - the difference between spending and tax income - was £20bn last month, up £2.2bn from a year earlier, the Office for National Statistics (ONS) said. |
| It is the second highest September borrowing since monthly records began in 1993, the ONS said. | It is the second highest September borrowing since monthly records began in 1993, the ONS said. |
| The figure is lower than in September 2020, at the height of the coronavirus pandemic, when the government was borrowing to fund schemes such as furlough, it said. | The figure is lower than in September 2020, at the height of the coronavirus pandemic, when the government was borrowing to fund schemes such as furlough, it said. |
| Energy bills forecast to rise above £4,000 in April | Energy bills forecast to rise above £4,000 in April |
| Energy bill help to be reduced from April | Energy bill help to be reduced from April |
| Millions of people struggling to pay their bills | Millions of people struggling to pay their bills |
| Borrowing set to rise | Borrowing set to rise |
| But economists warned that government borrowing is set to rise further in the coming months. | But economists warned that government borrowing is set to rise further in the coming months. |
| The Office For Budget Responsibility (OBR) makes independent forecasts on what impact government decisions on things like tax and spending will have on borrowing and growth. | The Office For Budget Responsibility (OBR) makes independent forecasts on what impact government decisions on things like tax and spending will have on borrowing and growth. |
| It is due to issue its latest forecast on 31 October when the chancellor is due to deliver his economic plan detailing its spending plans. | It is due to issue its latest forecast on 31 October when the chancellor is due to deliver his economic plan detailing its spending plans. |
| Carl Emmerson, Deputy Director of think tank the Institute for Fiscal Studies (IFS), said so far for the first half of the year government borrowing was almost as expected but warned it was likely to rise much higher. | Carl Emmerson, Deputy Director of think tank the Institute for Fiscal Studies (IFS), said so far for the first half of the year government borrowing was almost as expected but warned it was likely to rise much higher. |
| "But this is little guide to how much borrowing will be over the whole of this financial year, as the huge cost of government support for household and business energy use only began in earnest this month." | "But this is little guide to how much borrowing will be over the whole of this financial year, as the huge cost of government support for household and business energy use only began in earnest this month." |
| The IFS predicts borrowing this year could reach almost £200bn, "nearly £100bn more than the OBR forecast," he added. | The IFS predicts borrowing this year could reach almost £200bn, "nearly £100bn more than the OBR forecast," he added. |
| What does the Office for Budget Responsibility do? | What does the Office for Budget Responsibility do? |
| Michal Stelmach, senior economist at KPMG UK, also warned that government borrowing was expected to "only worsen from October onwards". | Michal Stelmach, senior economist at KPMG UK, also warned that government borrowing was expected to "only worsen from October onwards". |
| This was to due the government's energy price guarantee for households and businesses, on top of the second cost of living instalment and the support for pensioners, he said. | This was to due the government's energy price guarantee for households and businesses, on top of the second cost of living instalment and the support for pensioners, he said. |
| The Chancellor, Jeremy Hunt, said: "To stabilise markets, I've been clear that protecting our public finances means difficult decisions lie ahead. | The Chancellor, Jeremy Hunt, said: "To stabilise markets, I've been clear that protecting our public finances means difficult decisions lie ahead. |
| "We will do whatever is necessary to drive down debt in the medium term and to ensure that taxpayers' money is well spent, putting the public finances on a sustainable path as we grow the economy." | "We will do whatever is necessary to drive down debt in the medium term and to ensure that taxpayers' money is well spent, putting the public finances on a sustainable path as we grow the economy." |