The Pound Sterling has gone down in value even further, at a crucial time in summer when plenty of UK residents are getting ready to exchange their pounds into foreign currency in order to travel abroad.
This six-month low against the dollar has brought about even more concerns over the effect Brexit and the UK economy as a whole will have on the currency.
The Sterling went down by half a cent, thus having a value of less than $1.25 and teetering on €1.11. This is its lowest value since the well-known “flash crash” in January, when worries about Brexit were extremely high, whilst also not being too far off the lowest level of early 2017, when the Government of the United Kingdom invoked Article 50 of the Treaty on European Union, hence confirming their withdrawal from the European Union.
During the same time last year, the pound was trading at approximately $1.33 against the dollar, and €1.13 against the euro.
This latest fall against the dollar extends two weeks of drops in value for the pound, in the middle of concerns surrounding the weakening economic outlook, resulting in speculation regarding there being lower interest rates.
This was implied even more in a recent speech made by the Bank of England governor, Mark Carney, who rather gloomily implied that policy makers might be utilising a more expansionary monetary policy, in order to boost investment and output, by lowering the level of interest rates, to combat a possible recession.
According to a business survey done on the second quarter of 2019, the UK economy shrank drastically, leaving it on the brink of a recession, with a potential no-deal Brexit looming on the 31st of October, which has even more consequences on the UK economy.
Ireland’s finances ministers on Tuesday said that they now think that there is a significant possibility of the UK departing the EU in a chaotic manner, and so Ireland is going to be taking measures in order to protect itself from any legal consequences that may arise.
Adding to such concerns, the British Retail Consortium reported the worst June decline in sales since the association began taking records in 1995, hinting that consumers are being put off by non-essential purchases due to the uncertainty surrounding Brexit.
This recent drop in value of the pound comes ahead of the official monthly growth figures on Wednesday, as well as the Bank of England’s Financial Stability Report which is to be issued on Thursday.
The Labour leader, Jeremy Corbyn, made the party’s intentions clear, by announcing that the party will be backing remain in any referendum that is called on by the Conservative party.
Corbyn stated that “Whoever becomes the new prime minister should have the confidence to put their deal, or no deal, back to the people in a public vote.”
This comes after plenty of people have seemingly changed their mind on the repercussions that Brexit is having and will have on the UK, with the economy suffering greatly.