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Pound sinks as UK economic uncertainty rises 

The pound fell against the dollar on Friday as new figures showed a gloomy picture for the UK economy.

Sterling slipped to $1.11, after rallying on Thursday as Prime Minister Liz Truss resigned.

However, it clawed back losses on Friday evening and was back up to around $1.12 against the dollar.

The volatility in the pound came after official figures showed government borrowing rose to its second highest September on record.

Meanwhile, people are shopping less than they did before the coronavirus pandemic, according to figures from the Office For National Statistics (ONS).

Retail sales fell by more than expected last month, dropping 1.4% and continuing their slide from August, the official figures showed.

The pound’s latest slide comes after a period of volatile trading for the currency.

It plunged to a record low against the dollar last month, while government borrowing costs rose sharply in the aftermath of the mini-budget. Investors were spooked after the government promised huge tax cuts without saying how it would pay for them.

Government borrowing costs also rose slightly on Friday.

A fall in the US dollar against a number of currencies late Friday helped the pound regain some ground.

But Jane Foley, a currency strategist at Rabobank, said much of the pound’s moves are being driven by investors reacting to political and economic uncertainty in the UK as well as the negative economic data.

Writing by Omotola Oguneye