Theresa May plays down sterling volatility as pound plunges against the dollar


Prime Minister Theresa May has played down the significance of volatility in sterling, which saw the value of the pound plunge to a 31-year low against the US dollar.

The 0.5% fall to 1.277 dollars reflected concern in the markets over Mrs May's insistence she will assert control over immigration after Britain leaves the EU, raising expectations that the UK is set for a "hard Brexit" in which it will lose full access to the single market.

And further signs of anxiety about the prospects for the UK economy came as the International Monetary Fund downgraded its forecast for Britain's GDP in 2017 by 0.2% to 1.1% while raising its outlook for this year by 0.1% to 1.8%.

Asked how worried voters should be about the fall in the pound, Mrs May told the BBC: "Currencies of course go up and down. If you stand back and look at the fundamentals of our economy, which are strong, if you look at the other economic data that has been around in recent weeks, if you look indeed at the most recent forecasts now coming out for growth in our economy this year, all of that is more positive than people had expected it to be and predicted it to be."

She added: "The IMF themselves have upgraded their forecast for growth in the UK economy for this year. They've said that the response to the Brexit vote was more orderly than people had expected it to be.

"Yes, the IMF and others have said that they are forecasting a slowdown in the economy next year. What the Government needs to do is to ensure that we are taking the right approach and that in terms of the process of Brexit, we are making that as smooth as possible."

Mrs May was speaking at the Conservative conference in Birmingham, where Chancellor Philip Hammond on Monday warned of a "roller coaster" of economic turbulence over the two-year process of negotiating Britain's withdrawal from the EU.

She said that Mr Hammond would have an opportunity in his Autumn Statement on November 23 to "set out a trajectory for the Government's response over the next year".