BREXIT AND FALLING POUND

BREXIT AND FALLING POUND




People worried about Brexit and falling pound, but what they haven't realised is that the value of pound on a downward spiral since January 2016 and this fall is not just because of Brexit. Banks have already predicted that the value of the pound is deem to fall since the pound is one of the overvalued currencies in the world. Deutsche Bank said late last year that the pound was one of the most overvalued currencies in the world.

The main reason for the drop is the low demand for the pound in world currency market, the low-interest rate is also not helping to steady the currency. Bank of England is taking steps to steady the ship and UK being one of the largest economies in the world must have an attractive interest rate get more investment into the country and have a steady pound.

Another reason for the fall is Britons large current account deficit, which measures the difference between money flowing in and out of the UK, has left Britain vulnerable to shocks. And because Brexit is a shock Britain's currency is affected, once people start to get confidence in the market the pound will be back on track.