The British Pound used to be the strongest currency around. When the U.K. originally joined the EU they kept their own currency, the pound, and benefited from it greatly. When the rest of the EU had to deal with the euro’s constantly changing value, the British Pound stayed on top of nearly every market.
But the Brexit vote, that lead to the United Kingdom’s decision to leave the EU, has brought about disaster for their currency.
Shocking Lows for Pound
It used to be common place to travel to the United Kingdom and have to spend $1.5 dollars or more, per one British pound.
But the past two weeks have been detrimental to the pound. It’s dropped to 31-year lows, the lowest it’s been since 1985. At it’s lowest trade today, it traded for $1.2796 in Asian markets.
The United Kingdom is still in an uproar, their Prime Minister has resigned, and the process to actually leave the EU will not start until he leaves office. Thousands against the vote (it was close vote, 52% for leave, and 48% for remain) marched on London, and the government is in chaos, with some leaders saying they’ll do what they can to stop the U.K. from leaving the European Union.
The Bank of England is trying to stabilize the chaotic economy by telling the bankers to start lending more money, but in the end, it isn’t money but uncertainty that is sinking the markets.
Since it could be another two years before the U.K. officially leaves the EU, the pound could face uncertainty for years.
To continue reading more about the Pound’s downfall, read the CNBC article here.