Pound horror as British currency bombs to lowest level since 1985

Gerard Lyons backs Liz Truss's economic plan

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This is its lowest level since 1985, when Margaret Thatcher was Prime Minister.

The news comes as a blow to the new Prime Minister Liz Truss in her second day in office.

Analysts have argued this latest decline is largely a result of the Tory leader’s entrance to Number 10.

Jordan Rochester, an analyst at Nomura, told the Telegraph: “A change of leadership is usually pound positive, especially when up to £130billion of fresh deficit spending may be on the agenda.

He commented on Ms Truss’s new package for energy bill support and its impact on the UK’s trade deficit.

Mr Rochester said: “It’s a recipe for the balance of payments to continue to deteriorate, the UK’s terms of trade to worsen and with it the the pound’s value to fall.”

Others suggested, however, that it was unfair to pin the news on the new Prime Minister.

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Instead, he added, it was “all to do with strong dollar and global prospects”.

Mr Evans said there was also a positive side to the story: that a “low pound is good for exports”.

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More to follow.

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