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Pound sinks as UK plans Covid-19 restrictions

The pound dropped to its lowest level for more more than a year after the UK government was reported to be preparing fresh Covid-19 restrictions.
Ministers and officials met on Wednesday to discuss moving to “plan B” with some measures due to take effect that evening, the Guardian said. People in England may be required to work from home where possible and undergo vaccine certification.

Prime Minister Boris Johnson could hold a news conference on Wednesday to announce the measures in response to the spread of the Omicron strain, the Financial Times said.

The pound dropped 0.5% to $1.616 after the reports and was down 0.3% to $1.32 at 13:15 GMT. The UK-focused FTSE 250 index lost ground, dropping from a day high of 23,375 to 23,276 though still up 0.17%.

Johnson also wants to “regain the initiative” after it reports his staff held a party in December 2020 when gatherings were banned, the FT said. The affair has caused chaos in Downing Street after ITV showed footage of senior officials discussing the party at a mock news conference.

Johnson and his ministers have said repeatedly that there was no party. The prime minister was on the ropes when questioned by MPs. He apologised for the footage and said there would be an official investigation into whether the party took place.

One of Johnson’s Conservative MPs criticised the idea of further Covid-19 restrictions and called the plan a “diversionary tactic”.

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