Pound tanks on 30th anniversary of Black Wednesday
Here’s our full story on the pound, which is tanking on the 30th anniversary of Black Wednesday, when the UK crashed out of the European exchange rate mechanism.
The pound sank to a fresh 37-year low against the dollar on Friday after weaker than expected retail sales raised fears that the British economy is already in recession, writes the Observer’s economics editor Phillip Inman.
Sterling fell by more than 1% against the currency to $1.1351, its lowest since 1985, partly reflecting broader dollar strength as well as specific concerns about the outlook for Britain. On the 30th anniversary of Black Wednesday when the UK crashed out of the European exchange rate mechanism, the pound also hit a 17-month low against the euro, with €1 worth 87.66p.
On Black Wednesday, sterling slumped 4.3% to finish the day at $1.778.
It came as the latest official data showed cash-strapped consumers cut back on spending by more than expected in August, when retail sales volumes in Great Britain fell by 1.6%. Economists had predicted a more modest fall of 0.5%.
The sharp decline in sales came after an upwardly revised 0.4% increase in July that appears to be a temporary bounceback after the Queen’s platinum jubilee celebrations in June.