British Pound Continues Slide Over Brexit Fears

The Guardian reports:

The pound fell below $1.21 for the first time since January 2017 as concerns mounted that the UK is heading for a no-deal Brexit. Sterling fell to $1.2085 before edging up to $1.2104, down 0.45% against a stronger US dollar. Against the euro the pound fell 0.01% to €1.0978.

Sterling’s fall will be felt immediately by holidaymakers abroad. At airports, travellers have been getting less than a euro and little more than a dollar for each £1.

In the longer run, a weak pound will increase the price of imports, from foodstuffs to electronic gadgets, pushing up inflation and it indicates a lack of confidence about the UK’s prospects in international markets.

Reuters UK reports:

For millions of people in Britain, the timing of sterling’s latest pre-Brexit fall could not have been worse, coming just as they prepare to head abroad on their summer holidays.

Clients at a money exchange shop in London’s Canary Wharf financial district said they were feeling the hit after the pound this week sank close to a decade-low against the euro and not far off its lowest level in 34 years against the dollar.

“I’m disappointed rather than surprised,” Gary Lacey, a 54 year-old bank cashier, said after settling for an exchange rate of less than 1.07 euros to the pound before he began a four-day trip to Austria. “The days of 1.60 are probably long gone,” Lacey said. “But you have to pay or you just don’t go on holiday.”

The pound is currently trading against the dollar for 20% less than before the Brexit referendum.