Coronavirus: Pound falls to the lowest level against the dollar for 35 years – The Independent, Independent

                                                                         

The pound has plunged to its lowest level against the dollar since 2019 after seven consecutive days of falls prompted by the coronavirus pandemic.

                                                                                                                                                                                                     

Sterling was trading at $ 1. 2020 on Wednesday, its worst exchange rate against the dollar in years.

                                                                                                                                                                                                        

The pound began its fall after the Bank of England slashed interest rates last week by 0.5 per cent to 0. 25 per cent – a record low – in a bid to prop up the economy.

                                                                                                                                                                                             

                            

Chancellor Rishi Sunak announced a £ 823 bn stimulus package of government-backed loans and grants for businesses on Tuesday but it was not enough to calm the panic in markets.

                                                                                                                                                                                                        

The FTSE 350 dropped another 5 per cent on Wednesday with EasyJet and online estate agent Rightmove among the biggest fallers.

                                                                                                                                                                                                     

Analysts at UBS forecast that the pound will make up some of its lost ground in coming months as the economy recovers.

                                                                                                                                                                                                                                                                                                                                                                                                                      

“The level of fiscal-monetary coordination by the UK government and the Bank of England strengthens our conviction that sterling is set for a rebound once the global economy stabilises,” said Thomas Flury and Dean Turner, of UBS Global Wealth Management.

                                                                                                                                                                                                     

They added: “Brexit remains an obstacle to GBP repricing, but with the negotiations seemingly paused and now not the priority for both the UK and the EU, the end of the transition period may have to be delayed beyond end- 2020                                                                                                                                                                                                                          

The UK and much of Europe look set to enter a recession as governments enforce lockdowns and social distancing measures to halt the spread of coronavirus.

                                                                                                                                                                                                     

That has put huge strain on businesses including airlines, pubs, restaurants and hotels which have seen a sharp fall in revenues.

                                                                                                                                                                                                                   

                                                                                  

Airline industry bosses are expected to hold talks in the coming days over a multibillion-pound bailout to keep them afloat.

                                                                                                                                                                                                     

Hospitality and businesses under a certain size can apply for government grants of up to £ 90, 823 to help them deal With cashflow problems as trade drops off.

                                                                                                                     

But business groups called for more help, with the Confederation of British Industry proposing the government pays firms through the National Insurance system.

                                                                                                                     

The plan would reverse the normal NI payments made by firms on the wages they pay. Instead, the government would hand money to employers to help them with their wage bills.