London Daily

Focus on the big picture.
Friday, Sep 11, 2026

Pound plunges to its lowest level in over 30 years

Pound plunges to its lowest level in over 30 years

The pound has fallen to its lowest level against the dollar since 1985, as the spread of the coronavirus pandemic spooks investors.

It is currently trading at $1.15, a fall of almost 5% in just one day.

It comes as financial markets tumbled again after major stimulus plans failed to quell fears about the economic impact of the virus.

The Dow ended down 6.3%, while the S&P 500 fell 5.1% and the Nasdaq dropped 4.7%.

Earlier the Dow and S&P 500 had plunged more than 7%, triggering an automatic temporary halt to trade, but shares recovered some ground as Congress appeared set to approve a relief bill.

The pound's weakness could partly stem from questions over how the UK government plans to pay for the emergency economic measures it has introduced, says Neil Wilson, chief analyst for Markets.com.

"This is the worst sustained period of sterling selling that I can recall," he says. "The government's massive fiscal package undoubtedly means more borrowing for the UK economy - how do we pay for all this?"

Meanwhile, the FTSE 100 index of top UK firms closed down 4%, with aerospace and travel firms among the hardest hit.


'Economic fight'

UK Chancellor Rishi Sunak revealed a £350bn stimulus package for UK firms on Tuesday, including £330bn of business loan guarantees.

It included aid to cover a business rates holiday and grants for retailers and pubs, while help for airlines is also being considered.

Despite this, investors are still flocking to the comparatively safer dollar, says Ranko Berich, head of Market Analysis at Monex Europe.

"The UK's response to the incoming coronavirus shock has been about as aggressive as possible in terms of monetary and fiscal policy, but this has done nothing to help sterling.

"Idiosyncratic factors such as the UK's monetary and fiscal response or Brexit are beside the point: this is about the US dollar, which is proving unstoppable as global financial markets stare into the abyss of crisis-like conditions," he said.

Investors say rescue measures can only blunt the pain, as countries close borders and order mass closures, bringing most economic activity to a halt.

The US on Tuesday outlined a $1tn (£830bn) proposal to support the world's biggest economy, which is expected to include direct payments to families, small business assistance and bailouts for airlines and other industries.

In the US, large companies have already announced more than 3,600 job cuts or furloughs, according to research firm Challenger, Gray & Christmas. The firm said some nine million other jobs at local bars and restaurants could also be at risk.

Car factories in the UK and elsewhere have halted production, while the slowdown has pushed other firms such as Laura Ashley and Flybe into administration.

Concerns about the damage have spurred a widespread sell-off. France's CAC 40 fell more than 6% while Germany's Dax dropped more than 5%.

Oil prices also plunged to levels not seen since the early 2000s, as demand contracts sharply, but exporters boost supply. The declines have even hit gold and government debt, which are typically considered less risky assets.

Asian markets have fared better than the US and Europe in recent days, but were also lower. Japan's benchmark Nikkei 225 ended Wednesday 1.7% lower, the Hang Seng in Hong Kong fell by 3.3%, and China's Shanghai Composite lost 1.8%.

Sterling's fall to a 35-year low against the dollar is clearly troubling.

It is down 12% since the beginning of last week, and 5% today alone. This is partly down to the strengthening dollar, due to its status as a "safe haven," the inevitable result of global volatility in financial markets amid the Coronavirus pandemic.

But those aren't the only reasons for sterling's weakness. The pound has sunk to to just over €1.06 against the euro- its lowest level since the depth of the financial crisis 11 years ago.

The pound is likely to be at a record low on measures of its global value, to be calculated tomorrow.

At the same time, UK government borrowing costs are creeping up, with the presumption these would stay "lower for longer" now being tested in global debt markets.

Traders have raised a range of reasons for why the UK is being particularly singled out for attention.

There is growing expectation of ever bigger fiscal injections to combat the economic impact of the pandemic and the UK is still very dependent on foreign flows of capital.

Its strategy for dealing with the pandemic was seen, say traders, as an outlier amongst the world's major economies.

Then there is Brexit. The UK has the extra economic challenge of dealing with a fundamental change to trading arrangements with the EU, perhaps on WTO tariffs, in the middle of this pandemic.

It is a very rough market out there, with some markets a little dysfunctional as traders are isolated away from their trading floors. But the UK is being singled out for especially tough treatment.

Newsletter

Related Articles

0:00
0:00
Close
John Lewis Partnership Loss Widens to £124 Million
UK Government to Put White Working-Class Social Mobility at Centre of Equality Policy
McLaren Plans £450 Million Technology Investment Creating 1,000 UK Jobs
UK Chancellor Faces Calls for Wealth Taxes and Public Ownership in Autumn Budget
English Mayors to Gain Powers to Impose Uncapped Overnight Tourist Taxes
JPMorgan’s Jamie Dimon Warns UK Government Against Bank Windfall Taxes
UK Air Traffic Control Outage Cancels More Than 2,000 Flights
UK Imposes Trade Ban on Israeli Settlements in the West Bank
UK Borrowing Costs Surge as Middle East Tensions Push Long-Term Gilt Yields to Highest Since 1998
Buckingham Palace Says Prince Harry and Meghan Will Not Resume Official Royal Duties
UK Treasury Faces Calls to Scrap £100,000 Childcare Support Threshold
Trades Union Congress Urges Labour Government to Rewrite Migration Policy
Riot Police Deployed After Anti-Migrant Protests Turn Violent in Portsmouth
UK Considers Replacing Some Disability Cash Payments With Direct Services
JPMorgan’s Jamie Dimon Warns UK Chancellor Against Higher Banking Taxes
UK Announces New Sanctions Targeting Israeli Settlements in West Bank
Metropolitan Police Investigate Alleged Illegal Donations to Reform UK
UK Charges Wiltshire Man With Assisting Russian Intelligence
UK Orders Urgent Review After Air Traffic Failure Cancels More Than 2,000 Flights
Merz Rebukes AfD Expansion in Saxony-Anhalt
King Charles Confirms Prince Harry and Meghan Will Remain Private Citizens
Labour Selects Former Child Refugee for By-Election in Keir Starmer’s Former Seat
Foreign Private Equity Accelerates Takeovers of London-Listed Industrial Companies
NHS Maternity Care Faces Scrutiny Over Support for Mothers After Caesarean Births
BBC Warns Staff Strikes Are Likely Amid Job Cuts and Programme Cancellations
English Housing Affordability Improves to Best Level in More Than a Decade
UK Health Commission Proposes Framework for Wider AI Adoption Across NHS
Labour Faces Pressure for Wealth Tax Ahead of Autumn Budget
Metropolitan Police Open Criminal Investigation Into Alleged Foreign Donations to Reform UK
UK Police Deploy Riot Officers After Anti-Immigration Unrest in Portsmouth and Dover
UK Defends Sanctions on Israeli Settlements Despite Diplomatic Retaliation
UK Air Traffic Control Failure Cancels More Than 1,000 Flights and Disrupts 65,000 Passengers
Compass Urges £10 Million Wealth Tax and Public Ownership Ahead of UK Autumn Budget
UK Government’s Devolution Plans Face House of Lords Scrutiny
Maldives Seeks New Chagos Sovereignty Talks With UK Prime Minister Andy Burnham
UK Airports Face Continuing Disruption After National Air Traffic Control Failure
UK Bans Imports From Israeli Settlements and Expands Sanctions on Iran
British Chambers of Commerce Forecasts UK Growth of 1% as Investment Remains Weak
UK Suspends Local Government Reorganisation Decisions and Cancels Planned Shadow Authority Polls
UK Parliament Opens Inquiry Into Gaps in Climate Change Preparedness
Andy Burnham and Xi Jinping Hold Talks on Trade, Security and British Consular Cases
UK Joins France, Canada and Other Nations in Measures Against Israeli West Bank Settlements
UK Announces New Sanctions Targeting Iranian Nuclear and Military Networks
British Chambers of Commerce Calls for Business Rate Reform and Productivity Support
UK Farmers Warn Dry Summer Could Reduce Crop Yields and Push Up Food Prices
UK Rail Networks Hit by Widespread Delays After Major Signalling Failures
Matt Clifford Resigns as ARIA Chair After Conflict-of-Interest Scrutiny
UK and France Say Joint Border Operations Have Prevented More Than 48,000 Irregular Channel Crossings
UK Core Inflation Remains Above Expectations as Utility and Commodity Costs Stay Elevated
Jaguar Land Rover Considers Up to 4,000 UK Job Cuts Amid Automotive Industry Pressure
×