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Jul 19 - 06:55 AM

GBP/USD - COMMENT-Truss Win Might Depress GBP/USD Towards 1985 Low

By Rob Howard  —  Jul 19 - 04:35 AM

Cable could tumble towards its all-time low of 1.0075 if Liz Truss wins the race to succeed Boris Johnson as Britain's prime minister, due to the risk of her upending UK tax and monetary policy.
1.0075 was the record low for GBP/USD in 1985, midway through Margaret Thatcher's 11-year term as PM.

A top Bank of England official on Monday pushed back at Truss's weekend suggestion that the government should set a "clear direction of travel" for monetary policy. nL8N2YZ2CC

Truss has also proposed plans to axe increases in payroll tax and corporation tax at a cost of over 30 billion pounds a year -- drawing strong criticism from fellow leadership contender Rishi Sunak, who said it would lead to higher inflation. nL1N2YY0DC

Former finance minister Sunak will face Truss in a run-off to be the next prime minister if Truss avoids elimination in the fourth and fifth rounds of voting by Tory MPs on Tuesday and Wednesday. nL1N2YZ0RB

The run-off will be decided by 200,000 Tory party members, with the winner to be announced on Sept.

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