At the same time the Bank welcomed the end of the summer uncertainty over energy bills, and anticipate that it will be big enough to prevent inflation spiralling higher. However Governor Bailey also acknowledged there were specific UK factors driving jittery markets, in addition to the strong dollar, especially the UK’s extra reliance on gas. As Chief Economist Huw Pill put it, that dependence is not going to change quickly, so the only real question is “who covers that cost?”. With sterling falling again today, to a 37 year low against the dollar, there are concerns in the markets that the PM and Chancellor will hope to contain tomorrow.
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Pound falls to lowest level against dollar since 1985