Keir Starmer’s Spending Cuts Dilemma & the Pound’s Down‑Ticking March

Sir Keir Starmer can’t say “no” to spending cuts any longer, and the British pound keeps slipping as the market plays the waltz of uncertainty.

What’s the news? Orc‑score for the currency!

• Exchange rate slump: The pound fell 1 cent to $1.21 on Monday, eye‑watering low since November 2023.
• Economic strain: “Increasingly dire,” says Ole Hansen, head of commodity strategy at Saxo. He warns that the Bank of England’s fight to keep growth afloat becomes harder as the currency weakens.
• Price pump looming: Down‑market pound may trigger hikes in fuel, groceries, and just about everything you buy.
• 2025 energy surge: Oil and gas have jumped thanks to strong winter demand (especially in the US). Added sanctions on Russia could tighten supply, boosting prices — a recipe for a sticky inflation story.

What does this mean for you, dear consumer?

Think of the pound as that friend who keeps losing weight; when it gets lighter, your grocery bill gets heavier. If the Bank of England can’t lower borrowing costs, we’re looking at a slow, painful walk through fiscal policy corridors.

In short: if Starmer’s budgets shrink, the pound could keep falling, and your wallet might feel the pinch — especially when winter flyers reach for energy and food.

Bottom line

Keep an eye on the currency chart and your pantry – both might surprise you in the coming months. Stay curious, stay updated, and chase those euro‑cooking opportunities!

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The Chancellor’s Calamity: Workers Hang on by Their Fingernails

It’s a thrilling musical of economic drama, and the biggest hit this week is the Chancellor’s eye‑popping metaphor—she’s hanging on by her fingernails while “business confidence has crashed.” The sentiment is amplified by a swirl of market chatter that makes every investor feel like a pirate on a rough sea.

What’s Key to This Nighty‑Night Situation?

• Sterling’s Weakening Slide – A 5% climb in XAUGBP in January, a massive 38% yearly bump, beats the FTSE that stays flat on the month and gets a mere 8% year‑on‑year.
• Gold’s Glow – The combination of a drifting pound and sun‑shining gold pushes investors to chase the combo like it’s a hot‑dog sale.
• Rate Cut Rumors – Every consumer’s wallet feels the sting as expectations for Fed and BoE cuts shrink faster than a shoe in a laundromat. Import prices rise; the squeeze is real.

The Edelweiss Forecast

Traders predict the pound might slump by up to 8% as government borrowing keeps putting pressure on it. Bloomberg’s latest twist: there’s significant demand for contracts that pay out at $1.20 or less. 1% lower than Monday’s price, and some traders are even gunning for sterling to dip below $1.12—the weakest in over two years.

Jamie Niven’s Call to Arms

“The path of least resistance is lower at this juncture,” says Jamie Niven, fund manager at Candriam. He points to minimal pricing in Bank of England cuts and sharp fiscal concerns that keep sterling sticky.

Cosmic Warners Pack a Punch

Enter Tony Redondo of Cosmos Currency Exchange. He’s not shy about predicting a dip to $1.15. “The pound’s already over 2.5% down versus the euro and nearly 5% versus the dollar since Christmas,” he told Sky News Money. “Further falls are slated across the board.”

• Eurozone: The decline is expected to be less brutal, thanks to “stagflation fears” and political stall‑tactics in Germany and France.
• Dollar: The pound could keep free‑falling, especially with last Friday’s stellar employment data nudging the market to think the Fed will cut rates in 2025. The economy is humming so sweet that it’s no surprise the US side stays on a slow‑roll cheat‑epic.