LONDON — Sterling is sliding to new lows on Wednesday morning after disappointing trade data was released by the Office for National Statistics (ONS).
The pound is down roughly 0.5% against the dollar as of 10.10 a.m. GMT (5.10 a.m. ET) falling as low as $1.2106 a few minutes ago. That takes it close to the currency’s post-referendum low (discounting October’s flash crash, when sterling dropped more than 6% in two minutes).
Here’s the chart:
The fall is due to weaker than expected trade data from the ONS, which showed that imports grew by £3.3 billion in November 2016 compared to November 2015 and exports rose at a more modest pace of £700 million. Overall, the UK’s trade deficit — the gap between what the value of what the UK exports and what it imports — stood at £4.2 billion in November, around £600 million more than forecast.
The trade deficit pours cold water on the idea that sterling’s post-referendum crash will help the UK’s economy by boosting exports as foreign nations and investors take advantage of cheaper British goods.
Sterling has had a turbulent week so far, falling more than 1% on Monday after Theresa May signalled in an interview that the UK is likely to quit the Single Market when Brexit occurs.