The pound fell against the dollar on Friday morning as new data showed a gloomy picture for the UK economy.
Sterling fell 1 percent to $1.11 against the dollar after rallying on Thursday following the resignation of Prime Minister Liz Truss.
It came as official data showed government borrowing hit the second-highest level on record in September.
Meanwhile, according to figures from the Office for National Statistics (ONS), people are shopping less than before the coronavirus pandemic.
The volume of retail sales fell by a more than expected 1.4% last month, continuing its slide from August, the ONS said.
The pound’s latest slide comes after a period of volatile trading for the currency.
It fell to a record low against the dollar last month, while government borrowing costs rose sharply after the mini-budget. Investors spooked after the government promised huge tax cuts without saying how it would pay for them.
A fall in the value of the pound increases the cost of goods and services imported into the UK from abroad – because when the pound is weak against the dollar or the euro, for example, companies in the UK can buy goods. Costs are high such as food, raw materials or parts from overseas.
A weaker pound could push rising costs higher as well if companies choose to pass on higher prices to consumers. For people planning to travel abroad, changes in the pound affect where their money will go abroad.
