Saudi Press

Saudi Arabia and the world
Wednesday, Nov 12, 2025

Pound plunges to its lowest level in over 30 years

Pound plunges to its lowest level in over 30 years

The pound has fallen to its lowest level against the dollar since 1985, as the spread of the coronavirus pandemic spooks investors.

It is currently trading at $1.15, a fall of almost 5% in just one day.

It comes as financial markets tumbled again after major stimulus plans failed to quell fears about the economic impact of the virus.

The Dow ended down 6.3%, while the S&P 500 fell 5.1% and the Nasdaq dropped 4.7%.

Earlier the Dow and S&P 500 had plunged more than 7%, triggering an automatic temporary halt to trade, but shares recovered some ground as Congress appeared set to approve a relief bill.

The pound's weakness could partly stem from questions over how the UK government plans to pay for the emergency economic measures it has introduced, says Neil Wilson, chief analyst for Markets.com.

"This is the worst sustained period of sterling selling that I can recall," he says. "The government's massive fiscal package undoubtedly means more borrowing for the UK economy - how do we pay for all this?"

Meanwhile, the FTSE 100 index of top UK firms closed down 4%, with aerospace and travel firms among the hardest hit.


'Economic fight'

UK Chancellor Rishi Sunak revealed a £350bn stimulus package for UK firms on Tuesday, including £330bn of business loan guarantees.

It included aid to cover a business rates holiday and grants for retailers and pubs, while help for airlines is also being considered.

Despite this, investors are still flocking to the comparatively safer dollar, says Ranko Berich, head of Market Analysis at Monex Europe.

"The UK's response to the incoming coronavirus shock has been about as aggressive as possible in terms of monetary and fiscal policy, but this has done nothing to help sterling.

"Idiosyncratic factors such as the UK's monetary and fiscal response or Brexit are beside the point: this is about the US dollar, which is proving unstoppable as global financial markets stare into the abyss of crisis-like conditions," he said.

Investors say rescue measures can only blunt the pain, as countries close borders and order mass closures, bringing most economic activity to a halt.

The US on Tuesday outlined a $1tn (£830bn) proposal to support the world's biggest economy, which is expected to include direct payments to families, small business assistance and bailouts for airlines and other industries.

In the US, large companies have already announced more than 3,600 job cuts or furloughs, according to research firm Challenger, Gray & Christmas. The firm said some nine million other jobs at local bars and restaurants could also be at risk.

Car factories in the UK and elsewhere have halted production, while the slowdown has pushed other firms such as Laura Ashley and Flybe into administration.

Concerns about the damage have spurred a widespread sell-off. France's CAC 40 fell more than 6% while Germany's Dax dropped more than 5%.

Oil prices also plunged to levels not seen since the early 2000s, as demand contracts sharply, but exporters boost supply. The declines have even hit gold and government debt, which are typically considered less risky assets.

Asian markets have fared better than the US and Europe in recent days, but were also lower. Japan's benchmark Nikkei 225 ended Wednesday 1.7% lower, the Hang Seng in Hong Kong fell by 3.3%, and China's Shanghai Composite lost 1.8%.

Sterling's fall to a 35-year low against the dollar is clearly troubling.

It is down 12% since the beginning of last week, and 5% today alone. This is partly down to the strengthening dollar, due to its status as a "safe haven," the inevitable result of global volatility in financial markets amid the Coronavirus pandemic.

But those aren't the only reasons for sterling's weakness. The pound has sunk to to just over €1.06 against the euro- its lowest level since the depth of the financial crisis 11 years ago.

The pound is likely to be at a record low on measures of its global value, to be calculated tomorrow.

At the same time, UK government borrowing costs are creeping up, with the presumption these would stay "lower for longer" now being tested in global debt markets.

Traders have raised a range of reasons for why the UK is being particularly singled out for attention.

There is growing expectation of ever bigger fiscal injections to combat the economic impact of the pandemic and the UK is still very dependent on foreign flows of capital.

Its strategy for dealing with the pandemic was seen, say traders, as an outlier amongst the world's major economies.

Then there is Brexit. The UK has the extra economic challenge of dealing with a fundamental change to trading arrangements with the EU, perhaps on WTO tariffs, in the middle of this pandemic.

It is a very rough market out there, with some markets a little dysfunctional as traders are isolated away from their trading floors. But the UK is being singled out for especially tough treatment.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Cristiano Ronaldo Embraces Saudi Arabia’s 2034 World Cup Vision with Key Role
Saudi Arabia’s Execution Campaign Escalates as Crown Prince Readies U.S. Visit
Trump Unveils Middle East Reset: Syria Re-engaged, Saudi Ties Amplified
Saudi Arabia to Build Future Cities Designed with Tourists in Mind, Says Tourism Minister
Saudi Arabia Advances Regulated Stablecoin Plans with Global Crypto Exchange Support
Saudi Arabia Maintains Palestinian State Condition Ahead of Possible Israel Ties
Chinese Steel Exports Surge 41% to Saudi Arabia as Mills Pivot Amid Global Trade Curbs
Saudi Arabia’s Biban Forum 2025 Secures Over US$10 Billion in Deals Amid Global SME Drive
Saudi Arabia Sets Pre-Conditions for Israel Normalisation Ahead of Trump Visit
MrBeast’s ‘Beast Land’ Arrives in Riyadh as Part of Riyadh Season 2025
Cristiano Ronaldo Asserts Saudi Pro League Outperforms Ligue 1 Amid Scoring Feats
AI Researchers Claim Human-Level General Intelligence Is Already Here
Saudi Arabia Pauses Major Stretch of ‘The Line’ Megacity Amid Budget Re-Prioritisation
Saudi Arabia Launches Instant e-Visa Platform for Over 60 Countries
Dick Cheney, Former U.S. Vice President, Dies at 84
Saudi Crown Prince to Visit Trump at White House on November Eighteenth
Trump Predicts Saudi Arabia Will Normalise with Israel Ahead of 18 November Riyadh Visit
Entrepreneurial Momentum in Saudi Arabia Shines at Riyadh Forward 2025 Summit
Saudi Arabia to Host First-Ever International WrestleMania in 2027
Saudi Arabia to Host New ATP Masters Tournament from 2028
Trump Doubts Saudi Demand for Palestinian State Before Israel Normalisation
Viral ‘Sky Stadium’ for Saudi Arabia’s 2034 World Cup Debunked as AI-Generated
Deal Between Saudi Arabia and Israel ‘Virtually Impossible’ This Year, Kingdom Insider Says
Saudi Crown Prince to Visit Washington While Israel Recognition Remains Off-Table
Saudi Arabia Poised to Channel Billions into Syria’s Reconstruction as U.S. Sanctions Linger
Smotrich’s ‘Camels’ Remark Tests Saudi–Israel Normalisation Efforts
Saudi Arabia and Qatar Gain Structural Edge in Asian World Cup Qualification
Israeli Energy Minister Delays $35 Billion Gas Export Agreement with Egypt
Fincantieri and Saudi Arabia Agree to Build Advanced Maritime Ecosystem in Kingdom
Saudi Arabia’s HUMAIN Accelerates AI Ambitions Through Major Partnerships and Infrastructure Push
IOC and Saudi Arabia End Ambitious 12-Year Esports Games Partnership
CSL Seqirus Signs Saudi Arabia Pact to Provide Cell-Based Flu Vaccines and Build Local Production
Qualcomm and Saudi Arabia’s HUMAIN Team Up to Deploy 200 MW AI Infrastructure
Saudi Arabia’s Economy Expands Five Percent in Third Quarter Amid Oil Output Surge
China’s Vice President Han Zheng Meets Saudi Crown Prince as Trade Concerns Loom
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
China’s lesson for the US: it takes more than chips to win the AI race
Israel and Hamas Agree to First Phase of Trump-Brokered Gaza Truce, Hostages to Be Freed
The Davos Set in Decline: Why the World Economic Forum’s Power Must Be Challenged
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Syria Holds First Elections Since Fall of Assad
×