As underlying uncertainty continues to loom over the infamous Brexit, the British Pound continues to fluctuate in value against other foreign currencies.
While the valuation of the pound continues to buffer, here are a few questions and answers that may be useful in helping you evaluate what the pound falling means for you:
Why did the British pound fall in the first place?
There are a few factors to consider. An important factor is uncertainty. There are a lot of foreign investors who have put their money into our economy, however, due to the uncertainty of our future economic position some investors decided the UK was neither a place to keep their money or invest it.
How and why does it affect shop prices?
Many of the goods we consume are imported. Examples of goods that are imported are petrol, food and Apple products. The pound falling results in these goods becoming more expensive that mean shops will have to increase their prices in order to sustain costs and profits. This is an example of inflation.
What does this mean for my money when I go on holiday?
The pound being weak in correlation to the euro and the dollar means going abroad to Europe or America will mean you are getting less for your money and spending becomes more expensive. Once there is more certainty about the consequences of Brexit, then there can be a clearer view of the costs of going abroad.
Will it more or less expensive to buy a house now?
Due to a lack of consumer confidence, it is currently a good time to shop around and potentially negotiate on house prices. Furthermore, if you were looking to get a house with a fixed rate mortgage, now is a better time than ever to solidify a good mortgage deal in case of any rising interest rates.
Will more jobs be available to UK graduates?
In the event that a recession occurs, it may be more difficult for new graduates to earn as much as graduates who obtained jobs in a thriving economy. Moreover, in the event that there was less freedom for British companies to hire graduates from the EU then it is likely to result in increased recruitment for British graduates.
A vital factor is whether the fall in the pound is a short term or long-term fluctuation. If the pound falls temporarily then prices may change for a short period of time. However, if the pound drops over a long period, then it gives more power to those who supply goods abroad, meaning they can determine how much we spend.
The best plan of action is to stay updated with news on Brexit and our website.
This post was written by Bola.