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The pound falls to record lows against the dollar, the biggest drop since 1985
The pound has hit a historic low against the US dollar. British media reported that the pound fell by nearly 5% this morning, the lowest level since 1985. One pound is equal to $1.0327.
The tax cut package prompted the market to give a verdict on the sustainability of public finances, given the additional demands it will impose on borrowing.
The problem for both the UK and Europe is that weak currencies raise import costs in dollars, further fueling inflation.