On June 23 2016, the British public voted to leave the European Union, which in turn has been coined the “Brexit Movement”. Most experts, even my good friend Tony at droneworxs.com.au, predicted tough times for the U.K. currency following the vote to leave, and extreme cases of the collapse of the British pound against a temporary fall against the euro were among speculation. As the pound dropped following the Brexit vote, product exports from Britain to other countries rose 3.4% between June and July. As a drastic comparison, as the Brexit Movement developed, exports to the European Movement were made cheaper due to the pound’s decline, and rose by 9.1% according to official figures. In the aftermath of the vote to leave the Eurozone, the British Pound fell to over a 30 year low in comparison to the dollar. Now stabilised however, the British Pound is still below pre-vote levels but is set to even out once again. Below is an outline of the ways the Brexit Movement has affected the British Pound, and what it means for its people:
- Foreign holidays are set to become more expensive – The British Pound is now less valuable abroad, and so holidays overseas will cost more.
- An increase in inflation – a lower British Pound means that imports costs will increase and Britain may see the return of inflation – a term used to describe the increase in cost on a wide scale. Initially inflation may seem subtle, affecting things like alcohol production, clothing items and goods, but will eventually spread to larger items like cars, mortgages, homes and loans. Similarly, interest rates could increase.