Exclusive | Pound’s plummet to 31-year low “not unwelcome”, says UK trade under secretary

The pound’s dramatic slip to a 31-year low against the US dollar is “not unwelcome”, according to Britain’s new under secretary for international trade.

The pound sterling plunged as much as 6 per cent in early Asian morning trading on Friday against the greenback after the French president pushed for a hard exit for Britain from the European Union.

The pound had “probably been too high anyway” against the euro and the dollar, and its drop was “clearly to do with the [Brexit] vote, but it’s not an unwelcome reaction,” said Mark Garnier, Britain’s parliamentary under secretary of state at the new Department for International Trade, during a press conference in Hong Kong.

The pound weakened to 1.1841 per dollar after president Hollande’s comments. It was trading recently at 1.2364 per dollar, and 1.1099 against the euro.

The plunge in the currency may have been exacerbated by algorithmic trading programmes, driving the currency lower by as much as 6.1 per cent over a two-minute period during Asian trading, according to a Bloomberg report, citing traders.

Currency volatility was “a bad thing” and would be a factor in investors’ confidence in Britain, Garnier said. Part of the problem was that the British parliament wasn’t sitting at the moment which meant there was a deficit of news, he said.