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How Is the Uk’s Cost of Living Crisis Impacting the British Pound?


Source: zdnet.com

It’s not easy to live in the UK these days. Even though it’s one of the strongest economies in the world, they also face many challenges after Brexit and the COVID-19 pandemic. Additionally, these days the nation faced another tragedy, the death of Queen Elizabeth II, and public mourning situation.

Britain has also experienced a huge rise in inflation over the last few years. Inflation refers to the increase in prices caused by rising costs of goods or services. It seems that Britain’s economy is struggling with the effect of low inflation and high unemployment, while there are so many job positions available.

Source: thebigissue.com

So, it’s not a surprise that the whole situation is affecting the value of the British pound. Also, British people expect printing new money, replacing the design of the Queen’s portrait with a new one, a photo of King Charles III.

So, many Brits are trying to manage the crisis by investing and trading through services like easymarkets, so they can manage to save something for the post-Elisabethan and post-Brexit reality.

However, the crisis began much earlier. Back in July and August, there were reports that the cost of living in the UK was making the economy slow and in steady decline.
With that, their national currency, the British pound, also weakened. Also, this currency has not been a financial safe-haven for some time. In August alone, its value weakened by 3%. Even now in September, the British currency is one of the worst-performing, even despite its stability.

Source: dw.com

According to known reports, this is the most volatile value in the last 27 years and it is expected that the British pound will recover in the next two years. The recession may continue to grow or decline, but stability is not expected until 2024.

On the other hand, the situation is pretty difficult everywhere in the world.
Still, the UK faces a lack of labor and professionals who can work in specific branches. The living crisis affects almost every sector of the economy and society.

Basic living products are getting more expensive than ever, and the prices still grow. Salaries are the same, which means the value of the money is lower compared to pre-COVID time. That’s why we face currency value fluctuations all these months, including the British pound, but also euro, and even CHFs and USDs.

Source: presstv.com

The market is unpredictable and we can’t really say when the situation is going to get better for the people.

Additionally, many Brits report they are angry the Royal Family spends so much money on a state funeral, even in times of crisis. Others, on the other hand, mourn together with them, claiming the Queen deserves all those things.

Of course, the predictions for the future are not bright, but sometimes things really do not match these predictions. We can only hope that in the near future the economic situation in Europe will stabilize and that this will help both the EU and non-EU countries to return the economy to a higher level.

And until then, the values of the currencies will fluctuate, because, in addition to the scarcity of resources, there is also stagnation in the circulation of money, because everyone wants to save as much as they can. But basic human needs remain, so the costs and prices of the products vary.



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