You may or may not have noticed the current state of the UK economy. With fuel prices on the rise, the cost of living increasing and more pressure being added to families than ever before, it’s hard to not notice a shift. The UK pound has fallen to its lowest level since covid began, but why?
What has happened to the UK pound?
Currently at its lowest level against the US dollar since the midst of the covid pandemic in July 2020, the UK pound has plummeted. With a slump in factors such as retail sales and high inflation, it’s easy to see why this has happened.
If you’re keen to keep an eye on the fluctuating market, it may be worth using the forex market to track the ever changing currency values. Because we’re seeing close to a 10% fall of the UK pound compared to the US dollar, now may be the perfect time to invest your money.
Why has it happened?
With inflation increasing in the UK, retail sales are low and in March, we’ve seen a drop in these by 1.4% when compared to the previous month. As they approach their lowest level in 50 years, it’s likely to take some time for the UK to see a full recovery.
Thanks to increase in gas prices too, this has also led to less fuel sales, ultimately harming the economy even further. With this decrease in purchasing petrol and diesel, it’s likely to result in fewer people commuting to work, further harming the overall economy.
External factors
Despite many reports the economy is making a strong increase post pandemic, it’s actually recovering much slower than people initially thought. While across the world, tensions in Russia have also increased inflationary pressures.
With a combination of the two, you have disrupted supply chains, increased political pressures and sanctions, all resulting in the UK’s economy making a much slower recovery.
What does this mean for the UK population
Both consumers and businesses are feeling the pain of the drop in the UK pound value. With prices continuing to rise, increasing inflation and everyday items becoming more out of reach, those living in the UK are likely to continue to struggle.
Unfortunately, with inflation going up much faster than salary growth, more households than ever are set to suffer with financial difficulties. This in turn will put added pressure on local councils and government resources, only aiding
What can you do?
There are a number of things you can do to help soften the financial blow. Try to be more mindful about what you’re spending your money on and make conscious choices where your money is concerned.
Remember, there are charities out there to help and support you if you’re struggling financially.
