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Pound hits record low against dollar amid ailing UK economy

The pound hit a record low against the dollar Monday on surging fears about the faltering UK economy.

Stock markets mostly extended losses and oil prices fell further after last week’s routs that were triggered by growing prospects of a global recession.

However, the Italian stock market climbed as markets assessed Italy’s future political landscape after Eurosceptic populists swept to victory in the eurozone member’s general election.

“The pound’s crash is showing markets have a lack of confidence in the UK and that its financial strength is under siege,” said Jessica Amir at Saxo Capital Markets.

“The pound is a whisker away from (dollar) parity and the situation is going to only worsen from here.”

Economists expressed concerns that last week’s huge tax-cutting budget from the government of new Prime Minister Liz Truss — aimed at helping the recession-threatened economy — could actually spark massive borrowing and further fuel inflation.

The pound on Monday struck an all-time low at $1.0350, days after new UK finance minister Kwasi Kwarteng’s inflation-fighting budget.

Sterling has struggled in recent years as the UK fails to strike major trade deals following its exit from the European Union.

Prior to Monday’s crash, the pound suffered a series of 37-year lows against the greenback this month on UK recession fears propelled by sky-high inflation.

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