Pound hits 14-month low against dollar as CBI hits out over ‘hole in confidence’
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Business group’s chair says government changes could prompt ‘quite an ugly rush’ of job losses. The head of Britain’s biggest lobby group has accused the government of damaging business “confidence and trust”, as the pound hit a new 14-month low against the US dollar.
Rupert Soames, the chair of the Confederation of British Industry (CBI), criticised the measures being introduced by the government. Sterling fell by nearly a cent, or 0.8%, against the dollar on Monday to $1.2111, the lowest since the end of October 2023 with the currency in focus after turmoil in the bond markets last week which piled pressure on the chancellor, Rachel Reeves.
The dollar has surged to its highest since late 2022 against a trade-weighted basket of currencies as investors have adjusted to expectations of delays in interest rate cuts from the US Federal Reserve fuelled by strong jobs data on Friday. The euro also extended losses against the dollar, falling to its lowest level since September 2022. The single currency slid by nearly 0.6% and is now worth $1.0185.
The rise of the dollar has added to pressure on the UK government, which has faced sustained criticism from lobby groups since raising taxes on business in Reeves’s budget in October. Soames said ministers had created “a hole in the confidence and trust that business has in government” after the tax rise and an increase in the minimum wage.
