The Pound remained lower against the dollar after Liz Truss was announced as the next UK Prime Minister on Monday, replacing departing Conservative leader Boris Johnson.
The Sterling was 1.1508 against the dollar in late afternoon trading, after falling to its lowest level since 1985 of 1.1474 in advance of the announcement over Monday morning.
Truss had been the favourite to win among analysts for the last couple of weeks, and secured a victory over former chancellor Rishi Sunak with 81,326 votes against Sunak’s 60,399.
“Foreign Secretary Liz Truss is expected to take over at the helm,” said City Index senior markets analyst Fiona Cincotta.
“However, the pound trading at its lowest level since March 2020 suggests that the market is worried about her strategy of cutting taxes to turbocharge the economy.”
“This could easily backfire and send inflation higher still.”
The Pound has taken a battering over recent weeks as the cost of living crisis deepens and the impact of the Ukraine war continues to spark recession concerns.
The currency fell to its lowest level since 2016 last week after the Resolution Foundation reported the UK was heading into its steepest living standards decline in a century.