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Pound Slumps to 7-Month Low

Pound Slumps  to 7-Month LowPound Slumps  to 7-Month Low

The pound has hit a new seven-month low against the euro, and is falling further against the dollar too. It fell by as much as 0.86% to €1.1279 against the euro, surpassing Friday’s seven-month nadir of €1.1287, news outlets reported. Against the dollar, it has extended its losses and is now down 0.6% at $1.2666. That’s its lowest level since last November. Hung parliament casts doubts over UK’s credit rating, warns Moody’s rating agency. The ratings agency said the lack of a decisive majority party could put the brakes on negotiations on Britain leaving the European Union, which would have a negative impact on the UK’s credit rating. A lower credit rating can make it more expensive to raise money, as the borrower is considered less able to manage repayments. As a result, lenders charge a higher interest rate to cover the risk of the borrower defaulting. Moody’s also said that Britain’s drive to reduce its budget deficit could be slowed down as a consequence of the election outcome, warranting further worries about the country’s rating.

 

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