WHY IS THE POUND STERLING FORECAST IMPORTANT?
Author : Eliza Nairn | Published On : 27 Sep 2021
As a consequence of the economic crisis in the early 20th century, many countries left the gold standard, which was currency value. The UK, too, did the same in 1931. They opted for the British pound sterling, and other countries decided to stabilize their currency rates with respect to the pound sterling. This shows how important and vital the value of a pound sterling was. They provided monetary stabilization. But over the years, that value decreased. From 1950, where 55% of the world’s reserves were in sterling - to 2011, it came down to 2% (international monetary fund). Since 1985, the pound sterling has come down from a pivotal role in the world economy to a minor role.
Importance of pound sterling forecast.
With the case of Brexit on a roll, and Covid-19, UK has been facing a rather heavy downfall in its currency rate. It can be said this is the steepest downfall Great Britain Pound has had to face in 300 years. And it’s predicted that the UK will continue to be under pressure for the rest of the year as well. Unemployment is tipping upwards as the days go by.
This is why having a constant lookout for the currency rate is important. This could happen to any country, but we need to keep an eye on the pound sterling forecast as we're talking about the UK now.
The current currency rate for 1 GBP = 100.66 INR. This means that the pound sterling is still higher than not only Indian rupees but also USD as 1 GBP = 1.37 USD. But this does not mean the state of the country looks any more fortunate. The real question is, will it continue growing weaker?
Let us look at the reasons why the current GBP forecast looks weak.
• The Covid-19 situation in the UK has worsened since the second wave, pressurizing public health care systems.
• Because of the pandemic, the global recession shows a decrease in the trade market and less demand for British goods.
• Uncertainty of the Brexit.
• The clash with other currencies, such as the American dollar, as the USA takes over with a smooth election.
• The downfall of the pound sterling can also affect the British expats in other countries, especially for their retirement plans.
Having a constant lookout for the pound sterling forecast also depends on the nation and factors like - politics and economy. The prolonged issue with Brexit and the recession and inflation that leads to increased interest rate cuts - can also affect the currency rate.
Check out poundrate.co.uk for the fluctuations and forecast of the British pound sterling.
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