The British pound has fallen to a record low against the US dollar will mean beer prices rise, a major brewery boss says.
Sterling fell by more than 4% to $1.0327 early on Monday morning, having already fallen on Friday following Chancellor Kwasi Kwarteng's 'mini-budget '.
The slump means the pound as its lowest rate versus the dollar since Britain adopted decimalisation in 1971. It means goods bought from the US - or, in the case of oil, paid for in American dollars - will cost more in the UK, as Brits' currency is worth less than before compared to the USA's.
Read more: Martin Lewis brands mini-budget as 'staggering'
One such good is hops, used in beer. While many UK breweries use mainly British hops, American hops are also imported to make beer in Britain.
Paul Davies, chief executive officer at Carlsberg Marston’s Brewing Company, has suggested the fall of the pound may cause a rise in beer prices.
He told BBC Radio 4’s Today programme that the drop was “worrying” for the British beer industry, which imports beer and hops from overseas. Breweries, bars and pubs are already facing rising costs due to energy prices and inflation.
Asked if the value of the pound mattered, he said: “Yes it does, many of the hops used in this country are actually imported and a lot of them, particularly for craft brewers, are imported from the States, so changes in currency is actually worrying for industry, for sure, and then of course people drink a lot of imported beers from Europe, and the euro vs the pound is also something we’re watching very closely at the moment.
“Of course things will rise, I would say as an industry we’re generally using British barley and we’re using a lot of British hops, but of course if you’re drinking double IPA that requires a lot of Citra hop and other hops from the States, and at some point that is going to have to be passed through to both the customer and the consumer if prices are this volatile.”
The Government remains focused on delivering its growth package despite the fall in the pound, a minister has said.
Asked by Sky News about the slide, Work and Pensions Secretary Chloe Smith said: “I am not going to be able to comment on particular market movements and there are various factors that always go into those.
“But the Government is absolutely focused on delivering the growth package as we set out, with various ways that we will be helping both businesses and households to move ahead to growth, and, as I say, to greater opportunity.
“For me in particular in the Work and Pensions department, I want to then be able to help more people into more good and well-paid jobs.”
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