British Pound Crashing Again Due to Brexit
IMAGE: The United Kingdom continues to suffer from Brexit. (Image courtesy Thinkstock)
You remember Brexit, that June referendum that passed, culminating in a massive reaction from the International community and eventually saw the resignation of Prime Minister David Cameron.
Well, the United Kingdom has a new prime minister, Theresa May, but the massive effect of Brexit’s result continues to rock the country.
According to Bloomberg, the British pound continues to slide amid May’s reluctance to kowtow to London banks as the prime minister continues to move towards the next stage of the country’s cessation of ties with the European Union.
The greatest takeaway from this week’s series of events is the pound dropping to record levels.
Bloomberg’s Charlotte Ryan reports the currency has reached a level not seen since 1985.
The report explains the impetus of the plummet: “The slide extended as Prime Minister Theresa May was said to take the view that financial services would get no special favors in EU exit talks.”
This means a tremendous amount for tourists, especially those touting dollars and heading to one of the more remarkable places on the planet.
Bloomberg explains that the pound reached an astounding level for those used to the high exchange rate. As of its writing, the pound was listed at $1.2720. Phenomenal news for tourists enjoying a favorable rate means troubling times ahead for locals who yearn for a rejuvenated economy.
Bloomberg quotes senior currency strategist Jane Foley who explains: “We have the market facing the reality that Brexit is about to begin and we could be faced with hard Brexit…just lacing the concerns the market already has about the outlook for growth, investment and jobs in the U.K. economy.”
Simon Kennedy’s Bloomberg report signals that the pound’s dismal showing is exacerbated by an overall grim global economy. As noted, the world economy has reached a six-year low.
Uncertainty abounds from the state of the pound to the effect the referendum will ultimately have on the likes of Scotland remaining a part of the UK.
May continues to work on negotiations ahead of a March deadline to move to a hard Brexit move. As the BBC notes, that affirmation of negotiations has had an ill effect on the British economy.
The result is an historic low for the British pound and resulting jubilation from travelers but dismay for those who continue to worry about the state of the nation’s economy.
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