Sterling weakened yesterday against the euro and US dollar as a numbers of factors – some new and some bubbling under for a while – persuaded the currency markets to sell sterling.
The first factor is the “energy crisis”, a trebling of gas wholesale prices that is going to see smaller power suppliers go out of business and much larger bills for customers.
Another sort of gas is also causing problems for UK business, with stocks of CO2 so low they are threatening the meat industry which relies on CO2 for packaging, as well as being essential for some alcoholic and fizzy drinks.
While some business are facing uncertainty, others are preparing for a resurgence. The reopening of flights to the US for vaccinated passengers from November supported the US dollar and travel stocks.
In the news this morning, UK government borrowing fell in August to £20.5bn – the second-highest figure ever for August but still more than £5bn down on last year.
