The value of the pound fell to as low as $1.1443, the lowest level since 1985, before recovering slightly. As of press time, one pound is currently worth $1.15. The pound has already fallen about 15 percent this year versus the dollar, the worst slump in the currency's value since June and July 2016 following the country's referendum on European Union membership.
Most of the causes for the slump in the pound's value are domestic. The U.K. is currently facing an energy crunch, threatening to leave many households with not enough energy to go around. (Related: GRID INSANITY: British government will start paying citizens huge sums to NOT use electric appliances.)
The country is also dealing with political uncertainty, as the scandal-ridden former Prime Minister Boris Johnson has just been replaced by Liz Truss, whose economic agenda has yet to be unveiled. There are also growing concerns that the Bank of England, the country's central bank, is unable to control the sky-high inflation.
Truss has pledged to cut taxes and introduce support for households struggling with soaring inflation and rising energy prices, a combination that the U.K. has called the "cost of living crisis."
"The economic challenges facing the U.K. economy are probably of a magnitude as great as anything we've seen in living memory," warned Mark Dowding, chief investment officer of London-based finance firm, BlueBay Asset Management.
Analysts predict pound will not recover anytime soon
Dowding warned that unless the British government takes action quickly the pound could fall to parity, or a one-to-one exchange rate, with the dollar in the next year. This has never happened in the more than 200-year history of the U.S. dollar and the pound interacting. The closest it got was in 1985, when the pound sterling fell to $1.05.
In a recent poll conducted by Reuters, financial analysts predicted that Britain's struggling currency will not regain much of its value against the dollar anytime soon. The pound's value is expected to only increase up to $1.16 against the dollar in one to three months' time.
In six months, the pound is expected to rise in value to $1.18 against the dollar, and in a year to $1.23. This is still far behind from its value of $1.35 at the beginning of the year.
When the analysts were asked what rate the pound will fall to within the next three months, the median response was $1.14.
"Recent sterling price action has been string partly for its resemblance to some emerging markets – higher inflation, higher rates and a falling currency," noted Goldman Sachs. "Our baseline assumption is that the most rapid phase of sterling underperformance is now behind us."
Adding to the concerns of impoverished Britons is the possibility of the Bank of England increasing interest rates by another 50 basis points (0.5 percent) next month after having already raised rates by 0.10 to 1.75 percent.
"The Bank of England is likely to hike further but real rates we expect to widen fuVrther, to the detriment of sterling," noted Roberto Mialich of international banking group UniCredit.
The pound sterling was once the preeminent currency of the world. But the pound's value has been declining steadily over the past century, coinciding with the rise in value of other currencies, most notably the dollar.
Learn more about the state of economies all over the world at MarketCrash.news.
Watch this clip from InfoWars with host Harrison Smith discussing how a "winter of great suffering" is coming for the U.K. as the globalists shut off access to energy with diminished supply and higher prices.
This video is from the InfoWars channel on Brighteon.com.
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Cost of living reaches epic highs in UK, "widespread civil unrest" looming.
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