The announcement generally contains details such as proposed changes to the tax system, new government initiatives and alterations to the welfare and social care system. Once a year the UK Chancellor outlines the budget for the next 12 months. It would come at a time when the UK, like most of the world, is dealing with record high energy prices and general rampant inflation. This would likely stabilize the value of the currency but would also cause havoc for businesses and individuals, who would see the cost of debt skyrocket overnight. This would take the UK’s base rate to 4.25%, and yields this high would make the Pound denominated debt and other investments much more attractive. The moves have been so drastic that there have been rumors that the Bank of England (the British version of the Fed), may need to step in with an emergency rate hike some are suggesting could be as high as 2.00 percentage points.

The foreign exchange market operates 24 hours a day globally, with traders and speculators able to make currency moves at various exchanges around the world.Īt the time of writing on Monday the pound was hovering at around $1.08 and is slowly gaining ground throughout the day.Īt one point the currency fell nearly 5% and even after this recovery is still down around 7% over the past two days.

The pound has rebounded slightly throughout trading on Monday but in early hours trading in Asia hit an all time low of $1.0327.

Freefall position vs. time