The pound hit a record low against the dollar Monday on surging fears about the UK economy after the government unveiled a huge tax-cutting budget.
The selloff came as equity markets across Asia and Europe fell again owing to a growing expectation that central bank interest rate hikes to fight runaway inflation would lead to deep and painful recessions. Oil also suffered more hefty selling.
Officials in several countries including the United States, Britain, Switzerland and Sweden announced more increases in the cost of borrowing.
The moves sent equity markets deep into the red again after officials reiterated their focus on fighting inflation, even if that means causing a recession.
But the biggest casualty of the week was the pound, which fell below $1.10 for the first time since 1985 as new finance minister Kwasi Kwarteng announced his controversial mini-budget.
It then extended the losses Monday to briefly touch an all-time low of $1.0350 in Asian trade after he said he intended to unveil further reductions, despite his budget causing ructions on London's markets.
It also fell to a two-year low against the euro, though the single currency remains under pressure against the dollar, sitting at 2002 levels.
Now, observers are warning that the pound could fall even further.
"The pound's crash is showing markets have a lack of confidence in the UK and that its financial strength is under siege," said Jessica Amir, of Saxo Capital Markets.
"The pound is a whisker away from parity and the situation is going to only worsen from here."
Kwarteng, who was appointed by Liz Truss after she became prime minister earlier this month, said he planned to slash taxes to kickstart the British economy and provide cash to cushion families from rocketing energy costs.
But investors were spooked by the huge amount of borrowing likely needed for the multi-billion-pound package, which critics said would benefit the rich far more than the poorest during a cost-of-living crisis.
Sterling's drop has led to speculation the Bank of England will have to step in with an emergency interest rate hike to give the currency a much-needed shot in the arm.
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"Whether or not the UK government announcement of the biggest tax reduction since 1972... will in time yield a significant growth dividend is not something markets are yet willing to contemplate," said National Australia Bank's Ray Attrill.
"Instead, they were consumed by worries over the scale of near-term UK government financing needs, at a time when the current account deficit is running at more than eight percent of GDP."
He added: "Chatter about a possible UK sovereign rating downgrade has already begun."
And former US treasury secretary Lawrence Summers was scathing of Britain's recent monetary policy decisions.
"It makes me very sorry to say, but I think the UK is behaving a bit like an emerging market turning itself into a submerging market," he told Bloomberg Television's Wall Street Week last week.
"Between Brexit, how far the Bank of England got behind the curve and now these fiscal policies, I think Britain will be remembered for having (pursued) the worst macroeconomic policies of any major country in a long time."
The collapse in sterling came as markets across the world are sent into a spin by recession worries caused by a sharp tightening of monetary policy by central banks fighting decades-high inflation.
New York's three main indexes ended well down, with the Dow at a two-year low, and Asia followed suit.
Tokyo shed more than two percent as traders there returned from a long weekend break, while Seoul was off more than three percent, with Sydney, Shanghai, Mumbai, Singapore, Taipei and Jakarta also tanking.
Hong Kong was also down having reversed early gains that came after the city said it would relax strict hotel quarantine measures for international travellers.
Still, Macau casino stocks rallied as the city said it would accept Chinese tour groups again from November, having been blocked during the pandemic.
London edged up tentatively after Friday's hammering, while Paris and Frankfurt were also higher.
Oil prices ticked lower, extending the big losses suffered Friday as expectations that a recession is looming hammer demand expectations.
The surging greenback added to the sell-off in crude, which is priced in dollars and therefore ore expensive for buyers using other currencies.
Both main contracts are sitting at their lowest levels since January, having wiped out all the gains seen in the wake of Russia's invasion of Ukraine.
Black Gold Investors' Gary Ross described the strong dollar as "a wrecking ball for commodities".
THE Covid inquiry has started examining how the pandemic affected care services for older and disabled people, with families describing the crisis as one of the worst failures of the pandemic.
Nearly 46,000 care home residents died with Covid in England and Wales between March 2020 and January 2022, with many deaths happening in the first weeks of the outbreak.
Families have waited years for this part of the inquiry, which will look at key decisions including why hospital patients were moved quickly into care homes in March 2020 without being tested for Covid.
Pete Weatherby KC, representing bereaved families, told the inquiry that a top government official had called what happened a "generational slaughter" in care homes.
"We call out the callous way that family members were treated by politicians and policy makers, referring to them as bed blockers and people nearing the end regardless of the virus," he said.
The inquiry heard how care homes were told to take patients from hospitals to free up beds. Between early March and early June 2020, around 25,000 patients were moved to care homes, many without Covid tests.
Government advice on April 2, 2020 said "negative tests are not required" before patients went to care homes. This only changed on April 15, 2020.
A 2022 High Court ruling found this policy was unlawful because it failed to consider the risk to vulnerable care home residents.
Geraldine Treacy's mother Margaret Stewart died in a care home in Northern Ireland. She said: "The home had to accept people from the hospital, who hadn't been tested and subsequently they became very sick."
She described visiting her mother while wearing protective gear: "She couldn't see who I was and she was very, very upset. She was 87 and she was screaming for her mum."
Care workers described being left without proper protective equipment and testing kits early in the pandemic. One worker in Durham said their home lost 25 residents in three weeks.
"Once Covid was in our care home, it spread like wildfire and we could not do anything about it," they said. "At one point, 67 out of 87 residents tested positive."
Staff had to help families say goodbye over video calls. One worker recalled holding a resident's hand up to an iPad screen so his daughter could pretend to hold hands through the screen as he died.
The inquiry will also examine why "do not resuscitate" orders were placed on some elderly residents without their agreement, and policies that stopped families visiting for months.
Maureen Lewis, who manages St Ives Lodge care home in northeast London, lost seven residents to Covid. She remains angry about former health secretary Matt Hancock's claim in May 2020 that the government had "thrown a protective ring around care homes".
"There was no ring of protection for care homes at all," she was quoted as saying. "He needs to take accountability for the decisions he made."
Hancock will give evidence on Wednesday (2). Bereaved families say they want him to "tell the truth" about decisions made during the pandemic.
Jean Adamson, whose father Aldrick died with Covid in April 2020, called the hospital discharge policy "reckless".
"The way that my father and tens of thousands of other care home residents were sacrificed really gets me because I think it smacks of ageism and disability discrimination," Adamson said. The inquiry is expected to last five weeks, with 55 witnesses giving evidence. The final report will not be published until next year.
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Keir Starmer speaks to members of the media during a visit to RAF Valley, on Anglesey in north-west Wales, on June 27, 2025. PAUL CURRIE/Pool via REUTERS
PRIME MINISTER Keir Starmer and Glastonbury organisers said on Sunday (29) they were appalled by on-stage chanting against the Israeli military during a performance at the festival by Punk-rap duo Bob Vylan.
During their show on Saturday (28), the duo chanted "Death, death, to the IDF" in reference to the Israel Defense Forces, the formal name of the Israeli military.
Police said they were considering whether to launch an investigation, but did not name Bob Vylan or Irish rap band Kneecap, who appeared on the same stage and also criticised Israel.
"Video evidence will be assessed by officers to determine whether any offences may have been committed that would require a criminal investigation," Avon and Somerset Police, in western England where the festival is held, said on X late on Saturday.
"There is no excuse for this kind of appalling hate speech," Starmer said in a statement. "I said that Kneecap should not be given a platform and that goes for any other performers making threats or inciting violence."
The festival organisers criticised the chanting by Bob Vylan, which comprises the guitarist-singer with the stage name Bobby Vylan and a drummer known as Bobbie Vylan.
"Their chants very much crossed a line and we are urgently reminding everyone involved in the production of the festival that there is no place at Glastonbury for antisemitism, hate speech or incitement to violence," it said on Sunday.
The Israeli Embassy in Britain condemned the "inflammatory and hateful rhetoric expressed" on stage.
Bob Vylan's band members did not respond to a request for comment.
Starmer also criticised the BBC, which transmits much of the festival live, for showing the performance. "The BBC needs to explain how these scenes came to be broadcast," he said.
The BBC said some of the comments made during Bob Vylan's set were deeply offensive.
"During this live stream on iPlayer, which reflected what was happening on stage, a warning was issued on screen about the very strong and discriminatory language," a spokesperson said.
"We have no plans to make the performance available on demand."
Bob Vylan's show on the festival's West Holts stage took place just before controversial Irish rap trio Kneecap played to a huge crowd, leading chants against Starmer and also taking aim at Israel.
During the show, frontman Liam Óg Ó hAnnaidh accused Israel of committing war crimes, saying: "There's no hiding it."
Known by the stage name Mo Chara, he was charged with a terrorism offence last month for allegedly displaying a flag in support of Iranian-backed militant group Hezbollah at a concert. He has denied the charge.
Starmer had said it was ""not appropriate" for Kneecap to play at the festival.
A senior member of his government, health secretary Wes Streeting, earlier on Sunday criticised the chants by Bob Vylan but added that he was also appalled by violence committed by Israeli settlers in the occupied West Bank.
"I'd also say to the Israeli Embassy, get your own house in order in terms of the conduct of your own citizens and the settlers in the West Bank," Streeting told Sky News.
Political commentator Ash Sarkar said it was typical of punk musicians to spark controversy.
"Don't book punk bands if you don't want them to do punk stuff," said Sarkar, a contributing editor to Novara Media, a leftist media organisation.
(Reuters)
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A flooded street near Station Road after heavy rainfall in Hyderabad, Pakistan, on June 27, 2025.
AT LEAST 45 people have died in Pakistan over the past few days due to flash flooding and heavy rainfall since the beginning of the monsoon season, according to disaster management officials on Sunday.
The highest number of deaths was reported in Khyber Pakhtunkhwa province, which borders Afghanistan. There, 21 people were killed, including 10 children.
According to the disaster management authority, 14 of those deaths occurred in the Swat Valley. Media reports said a flash flood in the valley swept away families who were on a riverbank.
In Punjab, Pakistan's most populous province bordering India, 13 people have died since Wednesday. Among them were eight children who were killed when walls or roofs collapsed during the heavy rainfall. The remaining adults died in flash floods.
Another eleven deaths linked to the monsoon rains were reported in Sindh and Balochistan provinces.
The national meteorological service has warned that the likelihood of heavy rainfall and potential flash flooding will remain high until at least Saturday.
Last month, severe storms led to the deaths of at least 32 people in Pakistan. The country has experienced several extreme weather events in recent months, including strong hailstorms in the spring.
Pakistan, home to around 240 million people, is among the countries most vulnerable to the impacts of climate change and is witnessing an increasing frequency of extreme weather conditions.
(With inputs from AFP)
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The UK is bracing for potentially one of the hottest June days on record
Temperatures may hit 34°C in Greater London and Bedfordshire
Amber alert in place across five regions due to health risks
Wimbledon’s opening day to be hottest on record
Risk of wildfires in London labelled “severe”
Scotland and Northern Ireland remain cooler
Hottest June day in years expected as second UK heatwave peaks
The UK is bracing for potentially one of the hottest June days on record, with temperatures expected to reach 34°C on Monday (30 June). The ongoing heatwave, now in its fourth day, is most intense across the South and East of England, particularly in Greater London and Bedfordshire.
Although there is a small chance of temperatures hitting 35°C, they are unlikely to surpass the all-time June record of 35.6°C set in 1976.
Amber health alerts and travel impact
The UK Health Security Agency (UKHSA) has kept an amber heat-health alert in place across London, the East of England, the South East, South West and East Midlands. The alert, in effect since Friday, warns of increased strain on health services and a higher risk of death among vulnerable groups.
Yellow alerts have been issued for the West Midlands and Yorkshire and the Humber, where the impact is expected to be less severe.
The high temperatures may cause travel delays, particularly in the areas covered by the amber alert.
Events issue heat guidance
Glastonbury Festival organisers have advised attendees to leave the site before early Monday to avoid the rising heat. Wimbledon is also expected to experience its hottest opening day in the tournament's history.
Night-time temperatures will offer little relief, staying around 20°C into Tuesday in many southern regions.
Wildfire threat in London
The London Fire Brigade has described the wildfire risk as “severe”. Assistant Commissioner Thomas Goodall said the combination of intense heat and low rainfall in recent weeks has created dangerous conditions for fires to spread quickly.
Cooler in Scotland and Northern Ireland
While much of England swelters, Scotland and Northern Ireland are expected to remain relatively cool, with temperatures between 17°C and 22°C and rain moving in later on Monday.
This is the UK’s second official heatwave of the year. A heatwave is defined by the Met Office when specific regional temperature thresholds—between 25°C and 28°C—are met for three consecutive days.
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Air India's Boeing 787-8 aircraft, operating flight AI-171 to London Gatwick, crashed into a medical hostel complex shortly after take-off from Ahmedabad on June 12.
INDIA’s junior civil aviation minister said on Sunday that all possible angles, including sabotage, were being looked into as part of the investigation into the Air India crash.
All but one of the 242 people on board the Boeing 787-8 Dreamliner were killed when it crashed in Ahmedabad on June 12. Authorities have identified 19 others who died on the ground. However, a police source told AFP after the crash that the death toll on the ground was 38.
Minister of State for Civil Aviation Murlidhar Mohol told NDTV that the investigation was examining “all angles”, including sabotage, in response to a specific question about the possibility.
“It has never happened before that both engines have shut off together,” Mohol said in the same interview, referring to speculation about a dual-engine failure.
He said it would be premature to draw conclusions before the final report is released.
A team investigating the crash began extracting and analysing data from the plane’s cockpit voice recorder and flight data recorder this week to reconstruct the events leading to the crash.
Air India said the aircraft was “well-maintained” and that the pilots were experienced.
“It (the plane crash) was an unfortunate incident. The AAIB has begun a full investigation into it... It is being probed from all angles, including any possible sabotage. The CCTV footage is being reviewed and all angles are being assessed... several agencies are working on it,” Mohol told NDTV.
Mohol said the extraction and analysis of the data was underway at a new state-of-the-art laboratory in Delhi.