Seven days in the Square Mile

The pound sank to a two-year low against the dollar, falling below $1.19 on concerns about future UK economic growth. Currency strategists said that political turmoil – including the resignation of the chancellor Rishi Sunak – was not a major factor in sterling’s decline, but warned the pound could yet fall further. The incoming president of the CBI employers’ group, Brian McBride, warned that the UK faces a deeper and longer economic downturn than many expect, with living standards likely to be set back by at least two years. The new Chancellor, Nadhim Zahawi, vowed to cut taxes, claiming that “nothing is off the table”. Concerns about recession triggered a sell-off in global stock and commodity markets. The FTSE 100 suffered its worst session since March on Tuesday, tumbling 2.8%. The euro fell to its lowest level against the dollar ($1.026) in two decades. The bloc’s inflation hit a record 8.6% in June, prompting the European Central Bank to warn of its intention to hike interest rates for the first time in 11 years this month.

J. Sainsbury, the UK’s second-largest supermarket chain, reported that sales are dropping and warned that pressure on household budgets would “intensify”. Volkswagen claimed it could overtake Tesla to become the world’s largest EV-maker by 2025. The Government delayed its decision on whether to allow the acquisition of Newport Wafer Fab by a Chinese company for two months. Hayden Wood, CEO of the collapsed energy supplier Bulb which needed a £1.7bn state rescue, belatedly resigned.