Brexit pound regains all lost ground after market over-reaction to Kwasi’s quasi-budget

Meanwhile, Euro has plunged 15% against US Dollar in the last 12 months

Montage © Facts4EU.Org

Facts4EU.Org and CIBUK.Org reveal more uncomfortable truths for the doom-mongers

The TV broadcasters and other media have been full of negative stories since Chancellor Kwasi Kwarteng’s mini-budget on 23 September. One of the most prolific of these doom-laden narratives was the fall in the value of the pound.

Now (at the time of writing) the pound is back to the same level it was at before the mini-budget. Facts4EU.Org thought readers might like to know this and the official facts are below.

Brexit Facts4EU.Org Summary

Pound-dollar exchange rate – Bank of England daily spot rate

Latest data at time of writing, from the day prior to the Chancellor’s mini-budget

[Source: Bank of England daily spot rates, pound-dollar.]

Commenting exclusively on our report today, former Secretary of State and former Single Market Minister, the Rt Hon Sir John Redwood MP, said:

The government’s media critics blame it for the pound falling but don’t praise it when the pound rises. They ignore the way the Euro and yen have also fallen against the dollar.
They are political campaigners, not reporters of the facts. They just represent the anti-growth coalition that wants to bring down the government.
- The Rt Hon Sir John Redwood MP, Fri 07 Oct 2022

Floating exchange rates mean the pound fluctuates on a daily basis

Exchange rates move all the time. They do so for all manner of reasons. Often a change in the value of the pound has nothing to do with the intrinsic value of the pound, but because of a change in the perception of the other currency, in this case the US dollar.

For example, if the markets suspect the Federal Reserve will once again increase interest rates in the US, the dollar will gain in value because money goes where it can get the best return. If the dollar rises, the pound falls in relative terms.

It is also the case that at times of international crises there is a tendency to invest in the main reserve currency, which is the dollar. Putin’s illegal invasion of Ukraine has most definitely had an impact in the markets.

The euro has fallen 14.7% against the US dollar in the last 12 months

Both the pound and the euro have been on a steady downward trajectory against the US dollar for a long time. This started well before Liz Truss became Prime Minister.

The pound may have suffered, but so has the euro. Below we show the fall in the value of the euro against the US dollar over the past 12 months.

Brexit Facts4EU.Org Summary

Euro-dollar exchange rate in last 12 months

[Source: European Central Bank.]

Observations

Facts4EU.Org - like the umbrella organisation to which we are affiliated, CIBUK - remains non-partisan. We have no allegiance to any particular political party and our focus is on seeing the United Kingdom achieve the full independence, sovereignty, and freedoms which people voted for in the EU Referendum of 2016.

Sometimes our reports will overlap with political events. For example it is impossible to avoid the recent changes in the leadership of the Conservative Party and the effects of these.

The value of the pound transcends party political considerations but where it becomes part of the anti-Brexit narratives of large parts of the media we feel obligated to redress the balance with facts, as we have done above.

We have also put the pound into context with the euro, which has also decreased in value against the US dollar in the past 12 months, albeit by not as much as the pound.

When did readers ever see a headline saying “Euro has plunged 15% against the dollar in the last 12 months”? Yet this is what has happened.

And no, they can’t blame Brexit for this one.

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[ Sources: Bank of England | European Central Bank | The Rt Hon Sir John Redwood MP ] Politicians and journalists can contact us for details, as ever.

Brexit Facts4EU.Org, Fri 07 Oct 2022

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Reader Comments 18

1. Rhys Rowlands , Friday, October 07, 2022, 07:50:

Awkward

2. John Hardman , Friday, October 07, 2022, 08:38:

Another great report that most UK media should read and hold your your left wing EU loving head in shame.
We see through all your biases reporting.

3. Sparky , Friday, October 07, 2022, 08:56:

GBP may have recovered but the stock markets haven’t. The handling of the mini budget by taking the Brexit mentality of ignoring experts undermined the confidence of the markets and caused the shock that required the BOE to react. The reputation of the British Government and the Conservative party have been severely damaged.
The expectation that the media will react the way the the Government wants is naive, the BBC and other media are not state media, they are led by creating headlines, something that Boris Johnson and Dominic Cummings understood so well in providing the media with the simple headline lies, mistruths and unrealistic promises that have not materialised. The false promises and slogans encouraged the British people to vote leave and is why, 6 years on, the Conservative party is divided into factions and we are no clearer about where Brexit is going other than meaningless slogans.

4. Buster , Friday, October 07, 2022, 09:40:

Ah Redwood. Brexit clown du jour.
Look the problem with what Brexitist Kwarteng did was mostly down to the way he did it. The tax cuts are neither here nor there. And as a well paid Remainer I would have benefitted from them.
But Kwarteng sacked the Treasury’s top civil servant, he refused to get his sums checked by the independent OBR - Brexitists don’t like independent experts - and then he tried to borrow masses of money without explaining how he would pay for it. It is economic illiteracy in the extreme and the resulting mess has made us all poorer.
If you have a mortgage - and I appreciate most of you red faced elderly leavers don’t - then your payments have risen hundreds of pounds per month. If you have a pension it’s value has plummeted. And this happened overnight. Because of the Brexitists.
Meanwhile the Tory posh schoolboys quaff champagne with the multi-millionaire disaster capitalists who got rich when the pound crashed and they tell you everybody else is the elite. And you Brexitists are dim enough to believe them.

5. Catherine , Friday, October 07, 2022, 09:47:

@3. Sparky: (i) You might have a look at the Dow Jones, the CAC 40, the Frankfurt Stock Exchange etc etc. Down 18%, 16% on a year ago. October 6 2021, the FTSE 100 stood at 6995. FTSE market close on 6 October 2022 was 6997. The UK stock market has been one of the world's better performers.
(ii) I am about to write to the Ombudsman to complain about serious factual inaccuracies and major omissions in the BBC's reporting of the Bank of England's intervention in the gilts market last week. For example, their Economics Editor claimed that the BoE would "buy up bonds in unlimited quantities". Factually wrong. The BoE had set a ceiling which was also time-limited. The BoE actually used 5% of the £65 billion, buying some £3.7 billion of gilts which it now owns - and on which it is now sitting on a profit.
(iii) That's just one example of main-stream media inaccuracy, which surely must be politically motivated.
(iv) Perhaps you might recall the Project Fear claims?
(v) Many readers of this excellent page strongly believe we only have a partial Brexit at the moment.

6. Catherine , Friday, October 07, 2022, 09:50:

@4. Buster: Are you sure you want your sums checked by the OBR? the organisation whose calculations/projections are out by 55% here, £100 billion there ..? Uses wildly out-of-date statistics (on the gas price) which are out by some 200%?

7. KB , Friday, October 07, 2022, 10:01:

Crikey talk about cherry picking the data !
The Euro has devalued by 15% versus the US dollar in the last year.
Well the GB Pound has devalued by 17.5% against the dollar in the same period !

8. Sparky , Friday, October 07, 2022, 11:10:

Catherine, the miss handling of the mini budget was on 23 September not a year ago. The £3.7 billion was also reported by FullFact on 5 October, relieved it was only £3,700,000,000 that the BOE had to use to rescue the mini budget mess. There is and always will be political motivation in the media as long as they get the headlines the media hunger for, if it’s the truth we want then we need to start with our politicians. There were lies, exaggerations on both sides of the campaign, it’s just that leave we’re much better at it and because it was, and remains an uncharted future, much harder to challenge. We made a mistake coming out of the EU thanks to the slogans and false promises but now we don’t where we’re going.

9. Jim Worrall , Friday, October 07, 2022, 12:46:

I don’t believe it was a market over reaction. This has been driven by the MSM with labour on the band wagon!

10. Buster , Friday, October 07, 2022, 13:07:

No. This has been driven by Brexitists.
Unless you are a hedge-fund manager, a Russian oligarch or a disaster capitalist, Brexiters have made you poorer.

18 comments, page 1 of 2

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