British Pound Falls to Lowest Level Since 1985 as U.K. Economic Pain Mounts
The British pound slid to its lowest level against the U.S. dollar since 1985, a reflection of the U.K.’s dire economic situation. Investors are braced for sterling to weaken even further to a nadir not seen in more than two centuries of trading across the Atlantic.
The pound fell as low as $1.1443, the lowest level since 1985, according to FactSet, before recovering to trade up 0.1% midday London time Monday.
Well, the newly-minted prime minister is reportedly pursuing a decisive strategy of combining low taxes and government handouts:
Liz Truss has said she will press ahead with plans for the UK to be a low-tax economy with less focus on wealth redistribution under her premiership, despite calls for caution from Tory grandees.
There were also reports that Truss, who is expected to be named as the new prime minister on Monday, was considering freezing energy bills this winter at a cost mooted to be as high as £100bn.
Asked about her national insurance policies, she said it was fair that her planned tax cut would benefit the highest earners 250 times more than the poorest, arguing it was wrong to view all economic policy through the “lens of redistribution”. …
The economy had been dodgy for some time and interest rates sky high. I think our mortgage had been over 14%. Anyway, this is the year we moved to the US (temporarily, I hoped)
I think the poor exchange rate was partly due to the strong dollar as much as the British economy. In practical terms, the near parity between £ and $ really hit the assets we transferred…which was pretty much all of them.
We’re going back next week for our second visit this summer next week so I’ll tell myself it all evens out…NOT. I’m 70 today and arranged for my UK state pension to kick in on this date
Liz Truss has said she will press ahead with plans for the UK to be a low-tax economy with less focus on wealth redistribution under her premiership, despite calls for caution from Tory grandees.
The BBC ran a clip of her comments last night: “tax cuts and growth”. We in Shinyland know what that means: throwing vast amounts of money at the “JCs”, period. The Labour Party head’s reply was words to the effect “all she has talked about all summer has been tax cuts for corporations”.
arguing it was wrong to view all economic policy through the “lens of redistribution”.
Same as in Shinyland: throwing money at the “JCs” is “growth”, but doing anything that benefits the general population is socialistical “redistribution”.
Asked about her national insurance policies, she said it was fair that her planned tax cut would benefit the highest earners 250 times more than the poorest, arguing it was wrong to view all economic policy through the “lens of redistribution”.
If a person pays no XYZ tax, a cut in the XYZ tax rate will not directly benefit them. This does not mean that the current rate is necessarily correct or too low - it can still be too high.
I’ve also noticed an asymmetry: tax INCREASES are evaluated for fairness based on percentage rates, while tax CUTS are evaluated for fairness based on dollar amounts. In other words, a tax increase that bumps everybody’s XYZ tax up 10%, costing a wealthy person $10,000 and an average person $100, is perfectly fair, but a tax cut that bumps everyone down 9%, saving the wealthy person $10,000 and the average person $100, is a “tax cut for the rich”. Heck, even if the cut is heavily uneven and saves the average person $1000, it’s still a “tax cut for the rich” because in dollar terms the wealthy person got a bigger reduction.
My conclusion is that some people can’t differentiate between fairness and jealousy.
