Last year saw what is arguably the biggest referendum decision on record. On June 23rd 2016, the UK public voted to leave the European Union. Fast forward to today and ‘Brexit’ is still a fresh topic with even a mention of the ‘B’ word from political and banking officials seeing the British Pound taking a hit.
Since the referendum last year, the Pound has depreciated to 31 year lows against the US Dollar and 6 year lows against the Euro. Since its initial fall the Pound has fluctuated excessively with better than expected economic data out of the UK giving some support. However, ongoing uncertainty and the incoming triggering of Article 50 could see further downside risk for Sterling on the horizon.
Since the value of the pound has fallen, importing goods from overseas has become more expensive. What does this mean for UK consumers? The change in Sterling’s worth has a profound impact on families in the UK.
A recent poll carried out by ITV, commissioned that 74% of the public are worried about their finances in 2017. Rising food and clothing prices undoubtedly drive an increase in cost of living. So, a weaker pound affects us all. Subsequently, the falling pound will have a direct impact on holidaymakers, families, pensioners and workers.
Is this set to worsen?
Theresa May’s interview last week saw the UK’s PM hinting at a ‘hard Brexit.’ Theresa May has told Sky News that the UK could not hang on to “bits of EU membership” which has adversely affected Sterling.
PM Theresa May is expected to reveal a Brexit plan next Tuesday. Will the Pound recover? It will possibly be the usual story; the value of the GBP will drop again.
However, on a brighter note, tourism has boomed in post-referendum UK. The dramatic drop of the GBP has undeniably attracted more tourists to visit ‘Brexit land’ and enjoy international-tax free shopping.
Let Indigo FX help you…
If you do not want to get entangled in this economic chaos, we suggest you call us on 0207 856 2467 to speak to one of our professional traders. The FX market is extremely volatile due to substantial changes in the economic and political sectors. It is worth thinking about how you can protect your business and make the most out of your money. There are several ways Indigo FX can help you. We offer an exceptional service by providing you with a personal broker who will investigate ways to enhance and protect your bottom line.
We don’t know what 2017 will bring but Indigo FX will strive to enhance your margins and offer you market-leading rates for your daily FX transactions.