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09 October 2016

How pound’s falling value affects you

pound-sterlingThe tumbling value of the pound against the US dollar, euro and other currencies since Britain voted for Brexit could have a significant impact on British consumers and businesses.

Earlier, it collapsed in value to new 31-year lows, sparking market chaos and a Bank of England probe.

Here is a look at what the falling value of sterling means for the pound in your pocket.

Shopping

A weak pound could see higher prices at the tills as the cost of importing goods like food, petrol and electrical items becomes more expensive.

Some retailers including Tesco, Sainsbury’s, Asda, Morrisons, Marks & Spencer and B&Q warned ahead of the 23 June referendum that a drop in the pound, coupled with disruption to the supply chain, would cause prices to spike.

Fuel

The RAC is predicting the price of petrol and diesel at the pump will increase by around 3p per litre in the next fortnight following Thursday’s “flash crash”.

And according to its spokesman Simon Williams, it’s bad timing with oil prices already on their way up again.

He said: “The unexpected sharp fall in the value of the pound will make the wholesale price of fuel go up.

“With the pound now worth so much less, there can be no other outcome than an unwelcome increase at the pumps from the current national averages of 113p for petrol and 114p for diesel.”

Holidays

British holidaymakers’ spending power is being dramatically reduced in cities like New York and Paris, with the pound not only plunging against the US dollar, but the euro too.

Meanwhile, British expats paid in sterling will see a decline in the value of their wages and pensions.

Source: NewsSky

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