Pound Set to Devalue More Swiftly, Confirms UK Chancellor Rishi Sunak

Share Article
In Brief
The Trust Project is an international consortium of news organizations building standards of transparency.

In what may be good news for crypto holders, inflation in the UK is predicted to rise over the year. This will likely be a blow to the strength of the pound, however, as UK Chancellor Rishi Sunak announced the predicted inflationary increase during his third-quarter budget overview on Oct 27.

Sponsored





Sponsored

The Bank of England’s monetary policy states that the UK inflation should target 2%, but the current figure is 3.1%. 

In his address to the House of Commons (HoC), the Chancellor announced that interest rates were set to increase further to an average of 4% next year. It was a neat linguistic trick from the Conservative politician. To hit an average of 4% from a starting point of 3.1%, UK inflation may of course rise higher still.

Sponsored



Sponsored

“I have written to the bank of England today to reaffirm their remit to achieve low and stable inflation,” said Sunak to HoC. “I understand that people are concerned about global inflation, but they have a government here at home ready and willing to act.”

Inflation is the rate at which consumer prices increase relative to fiat currency, devaluing its purchasing power over time. While higher inflation is viewed negatively by fiat holders, the inverse opinion is generally held by crypto hodlers who expect the value of their crypto assets to increase in relation to fiat.

Capital gains taxes in the UK

In the lead-up to the budget discussion, the Chancellor was under pressure from opposition benches and some sections of the UK press to increase capital gains tax. Capital gains tax is applied to a number of areas, focusing on the appreciation of assets including property and cryptocurrency. 

Part of the clamor toward higher taxation for crypto users was fueled by the International Monetary Fund who advocated for higher capital gains in its April Covid Recovery report.

“Governments could consider higher taxes on property, capital gains and inheritance,” said the report co-signed by Paolo Mauro, the IMF’s deputy director of fiscal affairs.

In a blow to lobbyists and a further boon to cryptocurrency traders, Sunak failed to even mention the tax in the latest budget.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Sponsored
Share Article

Robert D Knight is a journalist and copywriter who has specialized in crypto for over four years. His varied experience includes freelancing, in-project contracts, agency work, and PR, giving him a holistic view of the blockchain industry.

Follow Author

$200 reward waiting for you — Deposit, Trade, Follow and Claim today!

Discover

Limited offer! Learn to mine and trade crypto today for free

Go