With the tumultuous Downing Street turbulence of the past six months, one fluctuating figure the British public will have been keeping a keen eye on is the strength and comparable value of the Pound.
Here at Ryans we’re interested in anything concerning your finances, and we’re going to explore how the Great British Pound (GBP) has been affected by the recent numerous changes in Prime Minister.
Pound Fluctuations 2022
2022 has been a year of some rises, but mostly falls for the Pound, as a vicious cycle of inflation, economic uncertainty due to socio economic and geo-political factors, and transitions of power, have shaken the UK.
The Pound reached its year high figure early on, with a US Dollar (USD) value of 1.3741, and declined steadily until early June, with few sporadic but hardly significant rises in between.
First PM Change: Johnson – Truss
As Boris Johnson announced he would be stepping down as PM on Thursday July 7th, the Pound actually rose in value against the USD by 0.8% to 1.2023.
This mini-resurgence of GBP after a languorous 6 month drop off from the year’s high point, sadly did not continue and normal service of decline was resumed after a brief rise in early August.
Liz Truss Announced As PM
After a two horse race for the leadership of the Conservative Party, and by extension, the residency of 10 Downing Street, Liz Truss beat out Rishi Sunak and was announced as the next Prime Minister of Great Britain on the 5th September 2022.
After an initial rise in the Pound’s value culminating on the 12th of September, the now infamous Truss – Kwarteng mini-budget sunk the GBP to its lowest value compared to the dollar since 1985. The very poorly received fiscal plans set out by the Truss government rendered the Pound’s USD value at a miserly 1.0721 on 27th September.
This was disastrous for the country’s economy, already under maximum strain through issues such as post pandemic normality, conflict within Europe and the ongoing cost of living crisis.
Second PM Change: Truss – Sunak
On the 20th October, 45 days after taking control of the Conservative Party, Liz Truss announced her resignation amid public and political backlash.
Her replacement would be decided after a short Party vote resulting in the election of the man who lost out to Truss just six weeks earlier for control of the Party, Rishi Sunak.
With the third Prime Minister inbound in a period of just four months, the value of the Pound amongst further compounding of public confusion, surprisingly rose on a brief promising trajectory after Truss announced her departure.
The Pound reached a level of 1.1632 against the dollar under the early stewardship of Sunak, but began to fall again as quickly as early November.
Current Status
The Pound since November has had several mini peaks and troughs but generally continued an upward trajectory, at the time of writing being valued at 1.1915 against the US Dollar.
As Sunak prepares his fiscal and economic plans only time will tell if he and his newly formed government will be able to steady the ship and maintain the precariously positive track the Pound seems to currently be on.
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