London Daily

Focus on the big picture.
Tuesday, Oct 14, 2025

Pound falls to lowest level since COVID crash after Nicola Sturgeon claims 'mandate' for Scottish independence referendum

Pound falls to lowest level since COVID crash after Nicola Sturgeon claims 'mandate' for Scottish independence referendum

"The UK has huge imported energy inflation and it is getting hit on both sides - from oil prices going up and sterling weakening," says Fahad Kamal, chief investment officer at Kleinwort Hambros.

The pound has fallen to its lowest level against the dollar since the onset of the pandemic, fuelled by concerns about the economy and the prospect of a second Scottish independence referendum.

Scotland's First Minister Nicola Sturgeon said earlier that her government had an "indisputable mandate" for another vote and was ready to set out more details of how this could be achieved without the approval of the UK government.

Sterling dropped below $1.20 for the first time since March 2020 - a drop of more than 1.2% on Tuesday.

When compared with the euro, the pound slumped 1.2% to 86.81p, its lowest point since last May.

"If I were to isolate the move lower down to one event, I'd most probably say that the Scottish independence risk was the straw that broke the camel's back," said Simon Harvey, head of FX analysis at Monex Europe.

Since the beginning of the year, sterling has fallen more than 11% with much of that decline attributable to a strong dollar - a safe haven for global investors in times of economic shock.

However, concerns about UK growth - tipped to be weaker over the coming months than in most rich countries - has added to the gloom for the currency.

There is added uncertainty about how fast the Bank of England can increase interest rates - which is needed to control soaring inflation - without causing economic damage.

Fahad Kamal, chief investment officer at Kleinwort Hambros, said the possibility of a new Scottish independence vote was "really bad news across a number of things".

"The UK has huge imported energy inflation and it is getting hit on both sides - from oil prices going up and sterling weakening," he said.

"It is putting Britain on a dangerous inflation trajectory and there is very little the Bank of England can do."

Typically, a fall in the value of sterling makes imports even more expensive, potentially contributing to inflation further.

Data released by the Office for National Statistics earlier this week unexpectedly showed that the UK economy contracted by 0.3% in April.

Newsletter

Related Articles

0:00
0:00
Close
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Australian Prime Minister’s Private Number Exposed Through AI Contact Scraper
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
China’s lesson for the US: it takes more than chips to win the AI race
Australia Faces Demographic Risk as Fertility Falls to Record Low
California County Reinstates Mask Mandate in Health Facilities as Respiratory Illness Risk Rises
Israel and Hamas Agree to First Phase of Trump-Brokered Gaza Truce, Hostages to Be Freed
French Political Turmoil Elevates Marine Le Pen as Rassemblement National Poised for Power
China Unveils Sweeping Rare Earth Export Controls to Shield ‘National Security’
The Davos Set in Decline: Why the World Economic Forum’s Power Must Be Challenged
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
×