The British pound continued its slide against the U.S. dollar this week, hitting a new record low against the greenback Monday.
"The pound's decline since last week shouldn't be misunderstood as a mere consequence of dollar strength. It is a consequence of an extremely risky budget by the new chancellor and a rather timid Bank of England that so far has only raised rates reluctantly despite all the clear pressures," British economist Jim O'Neill told CNBC on Monday.
The former Goldman Sachs Asset Management chairman and former U.K. Treasury minister said the Bank of England will have to raise interest rates "more aggressively" as a result, and the government will need to possibly "roll back some of its fiscal ambition" for the pound to recover.
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