Pound recovers after general election news

The pound fell 0.4% against the US dollar shortly after 10am this morning (April 18), when May revealed she would make an unscheduled statement on the steps of 10 Downing Street at 11.15am. The government was said to have remained tight-lipped over the reason for the statement.

The pound recovered quickly after the prime minister announced the snap general election. As of 11.13am, sterling was 0.1% stronger than the initial dip.

The prime minister said an election would be the only way to bring “certainty and stability”​.

May said: “I have concluded the only way to guarantee certainty and stability for the years ahead is to hold this election and seek your support for the decisions I have to make.”​

Challenging markets​

Meanwhile, leading food manufacturers have complained that currency factors have hit profits.

2 Sisters Food Group last month blamed currency fluctuations on its 17.8% drop in like-for-like operating profit​. 2 Sisters blamed its falling profit margin on the challenging markets in the wake of the Brexit vote.

In February, Snack foods giant Mondelēz International also blamed currency volatility​ on its £2.9bn fall in revenue last year.

Elsewhere, UK cereal manufacturer Weetabix warned of price rises​ in January, due to currency fluctuations. The weak value of sterling since the UK’s vote to leave the EU had boosted ingredient prices, because wheat is priced in dollars, it said.