How the falling pound affects you – and who the winners and losers are

Published

3 years ago

September 27, 2022

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Friday’s mini-budget that promised billions in tax cuts and a multi-billion pound energy price cap has seen the value of the pound plummet against foreign currencies.

The new prime minister and her chancellor’s decision to cut various taxes by a combined £45bn, alongside a cap on energy prices that will cost taxpayers £60bn has resulted in a loss of market confidence.

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That loss of confidence in the government’s ability to pay back the billions they are spending means the Bank of England is likely to raise interest rates – in a desperate bid to bring down inflation.

This all has an effect on Britain’s day-to-day spending. Here, Sky News looks at who will suffer and who will benefit from the pound’s slump.

Petrol

Fuel is traded in dollars.

This means that a low pound will buy less fuel, forcing prices at UK forecourts to rise.

Drivers will have noticed a recent dip in prices at the pumps – compared with this summer when they approached £2 a litre for diesel.

But the slump in value of the pound will likely wipe out that fall, which was a welcome relief for many.

According to the AA, a pound that equals $1.08 will mean an extra 13.5p per litre of petrol.

That would add around £7.50 to the cost of filling up an average 55-litre car, when factoring in VAT.

An AA spokesman added that had it not been for former Chancellor Rishi Sunak’s decision to cut fuel duty by 5p in March, motorists would have likely seen an even bigger increase in the price per litre – of around 18.5p.

Energy

Gas is also traded in dollars and therefore also suffers from a poor exchange rate.

As with oil, wholesale prices have dropped internationally since the start of the war in Ukraine, but with a weak pound, similarly the UK won’t experience the benefits.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, tells Sky News: “At this stage, this won’t affect bill payers directly, because the energy price cap is set below international energy prices, so we’ll be paying less anyway.

“Instead it will have an impact on how much the guarantee will cost the government.”

The more the price cap costs the government, the less confidence the market will have in the government’s capacity to pay it back, causing the original problem to spiral further.

Food

Any goods imported to the UK from abroad will cost more when the pound is weaker.

According to the government’s most recent food security report, the UK imports around 45% of its food.

This has proven a major problem during the Ukraine war, with grain exports unable to leave the country for several months this year.

Along with the dollar, the pound is also faring badly against the Euro, which will mean European-grown fruit and veg prices will increase.

Produce grown further afield, such as bananas, will also go up.

Not all retailers will pass all of that cost onto their customers, however.

Supermarkets are often the last to increase their prices off the back of rising costs, as they try to remain affordable, and often buy stocks in advance to mitigate sudden market shocks.

But Ms Coles cautions: “Supermarkets have warned that although they are already absorbing a great deal of the increased costs of supply, they have to pass some of it on.”

Tech

Most of our tech gadgets, such as smartphones and tablets, are manufactured abroad.

Apple, for example, is based in California, but uses parts manufactured in China and Taiwan.

Again, a week pound will mean these foreign-made products cost more in the UK.

Apple has already increased the price of its latest iPhone range. The iPhone 13 started at £949 when it launched last year. The iPhone 14 range is retailing at £1,099 – a 16% increase.

Holidays abroad

The most obvious place consumers will experience the slump in the pound is at the bureau de change.

Holidaymakers bound for the US will get particularly less for their money than they used to – but with the pound also down against the Euro, holidays to Europe will also be more expensive.

With the cost of fuel also on the rise, airlines and package holiday providers may also increase their prices to mitigate costs.

Mortgages

A weak pound means inflation – which is already at 10% – getting even higher.

When inflation is high, the Bank of England tries to bring it down by increasing interest rates.

This higher price of borrowing is designed to encourage people to borrow less, spend less, and save more.

Currently forecasts predict interest rates hitting 6% by November, which will mean huge increases in people’s mortgage repayments.

Halifax, the country’s largest mortgage provider, is removing fee-paying mortgages from Wednesday. These allow people to pay a fee in exchange for a lower interest rates.

Virgin Money and Skipton Building Society have withdrawn all their mortgage products until they have more certainty.

The two million people in the UK already on tracker and variable mortgages will see far more of their monthly pay packet spent on repayments.

And those coming to the end of a fixed rate or hoping to buy for the first time will have fewer, more expensive deals to choose from.

“The issue is the fact that fixed rate mortgages don’t just depend on the rate today, they also depend on rate expectation,” Ms Coles explains.

“The dramatic overnight change in market expectations of future rates has ramped up the cost of doing business, and lenders are taking a break to reassess and reprice.”

Pensions

People approaching retirement could suffer from UK bonds – or gilts – being sold off in response to the pound’s fall.

Some investors automatically switch people’s pensions from stocks to government bonds as they get closer to retirement age, which will leave them with a smaller pot in the current climate.

Pensioners living abroad will also suffer notably – as their pensions are paid in pounds but their expenses are in stronger currencies.

UK exporters

British businesses that sell their products and services abroad will benefit from the pound’s slump as foreign buyers look to take advantage of cheaper prices.

This will see the FTSE 100 companies benefit, as much of their money is made overseas, Ms Coles says.

It could also provide much-needed help for smaller UK businesses struggling with the increased costs of Brexit.

Local tourism

More holidaymakers could be drawn to the UK from abroad by the promise of a cheaper holiday.

While Britons get less for their money at the bureau de change, inbound tourists will get more.

For example, a London hotel room that cost $200 (£186) at the start of 2022 now only costs $150.

Britons could also return to the ‘staycation’ trend seen during the COVID pandemic and also help boost the economy by supporting tourism and hospitality businesses at home.

Hedge funds

Hedge funds employ a strategy called ‘short selling’ or ‘shorting’ to take advantage of falling market prices.

It involves borrowing shares in a firm and selling them with a view to buying them back at a profit when prices fall.

Ms Coles says: “Plenty of hedge funds were shorting the pound before the fall – based on the belief that the markets had underestimated how long inflation would stick around for.

“So these paid off when the pound tumbled.”

UK

Jaguar Land Rover production shutdown after cyber attack extended to 1 October

Published

6 hours ago

September 23, 2025

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Jaguar Land Rover production shutdown after cyber attack extended to 1 October

Britain’s largest car manufacturer, Jaguar Land Rover (JLR), faces a prolonged shutdown of its global operations after the company announced an extension of the current closure, which began on 31 August, to at least 1 October.

The extension will cost JLR tens of millions of pounds a day in lost revenue, raise major concerns about companies and jobs in the supply chain, and raise further questions about the vulnerability of UK industry to cyber assaults.

A spokesperson said of the move: “We have made this decision to give clarity for the coming week as we build the timeline for the phased restart of our operations and continue our investigation.

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“Our teams continue to work around the clock alongside cybersecurity specialists, the NCSC and law enforcement to ensure we restart in a safe and secure manner.

“Our focus remains on supporting our customers, suppliers, colleagues, and our retailers who remain open. We fully recognise this is a difficult time for all connected with JLR and we thank everyone for their continued support and patience.”

More than 33,000 people work directly for JLR in the UK, many of them employed on assembly lines in the West Midlands, the largest of which is in Solihull, and a plant at Halewood on Merseyside.

An estimated 200,000 more are employed by several hundred companies in the supply chain, who face a prolonged interruption to trade with what for many will be their largest client.

The “just-in-time” nature of automotive production means that many had little choice but to shut down immediately after JLR announced its closure, and no incentive to resume until it is clear when it will be back in production.

Industry sources estimate that around 25% of suppliers have already taken steps to pause production and lay off workers, many of them by “banking hours” they will have to work in future.

Another quarter are expected to make decisions this week, following JLR’s previous announcement that production would be paused until at least Wednesday.

JLR, which produces the Jaguar, Range Rover and Land Rover marques, has also been forced to halt production and assembly at facilities in China, Slovakia, India and Brazil after its IT systems were effectively disabled by the cyber attack.

JLR’s Solihull plant has been running short shifts with skeleton staff, with some teams understood to be carrying out basic maintenance while the production lines stand idle, including painting floors.

Among workers who had finished a half-shift last Friday, there was resignation to the uncertainty. “We have been told not to talk about it, and even if we could, we don’t know what’s happening,” said one.

Calls for support

The government has faced calls from unions to introduce a furlough-style scheme to protect jobs in the supply chain, but with JLR generating profits of £2.2bn last year, the company will face pressure to support its suppliers.

Industry body the Society of Motor Manufacturers and Traders said while government support should be the last resort, it should not be off the table.

“Whatever happens to JLR will reverberate through the supply chain,” chief executive Mike Hawes told Sky News.

“There are a huge number of suppliers in the UK, a mixture of large multinationals, but also a lot of small and medium-sized enterprises, and those are the ones who are most at risk. Some of them, maybe up to a quarter, have already had to lay off people. There’ll be another further 20-25% considering that in the next few days and weeks.

“It’s a very high bar for the government to intervene, but without the supply chain, you don’t have the major manufacturers and you don’t have an industry.”

What happened to the IT system?

JLR, owned by Indian conglomerate Tata, has provided no detail of the nature of the attack, but it is presumed to be a ransomware assault similar to that which debilitated Marks and Spencer and the Co-Op earlier this year.

As well as interrupting vehicle production, dealers have been unable to register vehicles or order spare parts, and even diagnostic software for analysing individual vehicles has been affected.

Last week, it said it was conducting a “forensic” investigation and considering how to stage the “controlled restart” of global production.

Speculation has centred on the vulnerability of IT support desks to surreptitious activity from hackers posing as employees to access passwords, as well as ‘phishing’ or other digital means of accessing systems.

In September 2023, JLR outsourced its IT and digital services to Tata Consultancy Services (TCS), also a Tata-owned company, intended, it said, to “transform, simplify, and help manage its digital estate, and build a new future-ready, strategic technology architecture”.

Resilience risks

Three months earlier, TCS extended an existing agreement with M&S, saying it would “improve resilience and pace of innovation, and drive sustainable growth.”

Officials from the National Cyber Security Centre are thought to be assisting JLR with their investigations, while officials and ministers from the Department for Business and International Trade have been kept informed of the situation.

Liam Byrne, a Birmingham MP and chair of the Business and Trade Select Committee, said the JLR closure raises concerns about the resilience of UK business.

“British business is now much more vulnerable for two reasons. One, many of these cyber threats have got bad states behind them. Russia, North Korea, Iran. These are serious players.

“Second, the attack surface that business is exposed to is now much bigger, because their digital operations are much bigger. They’ll be global organisations. They might have their IT outsourced in another country. So the vulnerability is now much greater than in the past.”

UK

Epping hotel asylum seeker jailed after sexually assaulting woman and 14-year-old girl

Published

7 hours ago

September 23, 2025

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Epping hotel asylum seeker jailed after sexually assaulting woman and 14-year-old girl

An asylum seeker has been sentenced to 12 months in prison after sexually assaulting a 14-year-old girl and a woman in Epping.

Hadush Gerberslasie Kebatu had been staying at The Bell Hotel in the Essex town, with the incident fuelling weeks of protests at the site.

The Ethiopian national was found guilty of two counts of sexual assault, attempted sexual assault, inciting a girl to engage in sexual activity and harassment without violence earlier this month.

Kebatu’s lawyer, Molly Dyas, told Chelmsford Magistrates’ Court on Tuesday that he wanted to be deported, calling it his “firm wish” and a view he held “before the trial”.

Under the UK Borders Act 2007, a deportation order must be made where a foreign national has been convicted of an offence and received a custodial sentence of at least 12 months.

Handing sentence, district judge Christopher Williams said the asylum seeker posed a “significant risk of reoffending”.

He also told the court that Kebatu “couldn’t have anticipated” his offending “would cause such a response from the public”.

“Particularly in Epping,” the judge said, “but also across the UK, resulting in mass demonstrations and fear that children in the UK are not safe.

“It’s evident to me that your shame and remorse isn’t because of the offences you’ve committed but because of the impact they’ve had.”

Kebatu bowed his head to the judge before he was led to the cells.

Chelmsford Magistrates’ Court was told Kebatu had tried to kiss the teenager, put his hand on her thigh and brushed her hair after she offered him pizza.

Kebatu, 41, also told the girl and her friend he wanted to have a baby with them and invited them back to the hotel.

The incident happened on 7 July, about a week after he arrived in the UK on a boat.

The girl later told police she “froze” and got “really creeped out”, telling him: “No, I’m 14.”

Kebatu was also found guilty of sexually assaulting a woman – putting his hand on her thigh and trying to kiss her – when she tried to intervene after seeing him talking to the girl again the following day.

He denied all the charges but was convicted earlier this month.

Kebatu knows ‘Epping is in chaos’ over actions

Prosecutor Stuart Cowen, discussing a pre-sentence report, said Kebatu admitted “he didn’t know the UK was so strict, even though he knew the Ethiopian age of consent was 18”.

Kebatu understood that “Epping is in chaos” because of what he did and that he “had got a lot of migrants in trouble,” Mr Cowen said.

He added that the asylum seeker “felt very sad and felt a lot of remorse,” but added: “The word manipulative is used within the report.”

Mr Cowen also read statements from both victims, with the 14-year-old girl, who cannot be named for legal reasons, saying she is now “checking over my shoulder” when she is out with friends.

She said she prepared the statement “so that the man who did this to me understands what he has done to me – a 14-year-old girl”.

She continued: “Every time I go out with my friends, I’m checking over my shoulder.

“Wearing a skirt now makes me feel vulnerable and exposed. Seeing the bench [where the sexual assault took place] reminds me of everything that happened.

“I’m aware there have been protests because of what has happened – I’m lucky that I was not in the country when that happened.”

The adult woman who was sexually assaulted by Kebatu and who also cannot be named for legal reasons, said: “Since the incident, I feel both angered and frustrated.

“He [Kebatu] did not even appear to know that what he’s done was wrong.”

UK

Grooming victim’s family ‘angry’ and ‘shocked’ prosecutors didn’t see police interview video

Published

15 hours ago

September 23, 2025

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Grooming victim's family 'angry' and 'shocked' prosecutors didn't see police interview video

The family of a grooming victim say they are “angry” and “heartbroken” that prosecutors didn’t see a video of her police interview during their investigations.

Jodie Sheeran, then 15, was allegedly taken to a hotel and raped in November 2004.

She’s believed to have been groomed by young men of Pakistani heritage for a year beforehand. Jodie’s son, Jayden, was born nine months later.

A man was charged, but the case was dropped a day before the trial was meant to start in 2005.

Her father, David, said they were told it was because Jodie had a “reckless lifestyle” and was “an unreliable witness”, but that they never received a formal reason.

In July, he told Sky’s The UK Tonight with Sarah-Jane Mee he thinks police “bottled it” because they were worried about being called racist.

Jodie died in November 2022 from an alcohol-related death.

It’s now emerged the Crown Prosecution Service (CPS) didn’t view the video of Jodie’s police interview as it “was not shared with us” and they didn’t know at the time that it still existed.

Instead, they only had a transcript of what she told officers.

It’s unclear exactly why this happened, but Staffordshire Police said the footage was available in 2019, when the CPS and police reviewed the case, and in 2023, when the investigation was opened again.

“I don’t know if I’ve been misled [or] it was an accident,” Jodie’s mother, Angela, told Sky News’ Sarah-Jane Mee.

“To suddenly say evidence has been there all along – and I’ve got every single letter, every email to tell me they haven’t got the evidence any more… and then it’s emerged Staffordshire Police did have the evidence after all – it was shocking really.”

The CPS watched the video last month and said the transcript is an accurate representation of what Jodie says on the tape.

However, it hasn’t changed their view that there’s no realistic prospect of conviction – and won’t be taking any further action.

Jodie’s father told Sky News he believes it shows the police and CPS “didn’t know what one another were doing – and it makes you so angry”.

“I feel like they’ve gotten away with it,” added Jodie’s son Jayden. “It’s years on now – I’m grateful they’ve found the evidence but what are they doing about it?”

‘I’ll keep fighting until I get justice’

Angela said it shows that other families in a similar situation shouldn’t “take no for an answer” from police or the CPS.

“Since losing a child, nothing else matters, so I’m not going anywhere,” she said.

“So I will keep fighting and fighting and fighting until I get justice for Jodie – and hopefully justice for probably thousands of other victims out there as well.”

A national inquiry into grooming gangs was announced in June after a series of cases uncovered sexual abuse of mainly white girls by men of predominately Pakistani heritage had taken place in a number of towns and cities.

A Staffordshire Police spokesperson said their thoughts remain with Jodie’s family and that a “significant amount of work has been undertaken reviewing this case several times”.

They said the interview video was “available to the Senior Investigating Officers in 2019 and 2023” and a “comprehensive contemporaneous written record” of it was given to the CPS on both occasions.

The statement added: “In August 2025, a copy of the recording was provided to the CPS who conducted due diligence to ensure the contemporaneous written record of Jodie’s ABE interview, that they reviewed in 2019 and 2023, was an accurate account of the video recording. They have confirmed this is the case.”

Police said the case had been submitted for a further evidential review.

“Should any new evidence come to light, it will be referred to the CPS for their consideration,” the spokesperson added.

The CPS said: “We carried out reviews of our decision-making in this case in 2019 and 2023 using records provided by Staffordshire Police – both these reviews found that there was not enough evidence to charge the suspect with rape.

“While we requested all available records, Jodie’s video interview from 2005 was not shared with us, we were not informed that it had been retained, and it was only made available to our prosecutors recently after further requests.

“Having cross-referenced the video with detailed accounts of it previously available to us, we have determined that the conclusions we reached in our previous reviews still stand.”

:: Watch the full interview on The UK Tonight with Sarah-Jane Mee from 8pm on Tuesday