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How did Brexit affect the value of the British pound? (x)

In early 2021 British pound exchange rate It was about 15 percent weaker against the euro than it was on the eve of the June 2016 referendum. Fluctuations in exchange rates and the value of the British pound were significantly affected by Brexit. There was more continuous decline in 2017 and 2019, and in August 2019 the British pound fell to its lowest point. Growing uncertainty, expectations about trade growth, and ongoing political instability caused all financial institutions to lose their British pounds.

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Changes in exchange rates are determined by the law of supply and demand, and are changed accordingly. If one of them rises in the case of an exchange rate pair, the other will definitely go down. People buy more of one currency while selling more of the other. The demand for the British pound has fallen since the Brexit vote.

The Brexit agreement went into effect on January 1, when the British pound managed to rise slightly against the US dollar to 1.12 euros. What do you expect in the long term? According to many think tanks (such as Change Europe), the impact of Brexit on the economy will be very slow. The center estimates that the British economy will contract by 4.9 percent in 15 years. English is likely to continue to decline in recent years. The only question here is how quickly these effects can take hold.

Is it worth saving in pounds? While the answer is not clear, common sense dictates that we should not save in sterling, even saving in dollars may be better. The UK also believes that a great deal of wealth will flow from the pound to the dollar. The London Stock Exchange is already under selling risk, as gas, oil and mining companies are concentrated here. UK government bonds are currently favored by escaping riskier bonds here, but foreign buyers remain confident that the pound will rise and the current turbulent period will soon be settled.

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In Hungary it is MNB . exchange rate And the OTP rate helps us keep track of the latest British Pound rates daily, so it’s a good idea to check websites every morning. If you have savings in sterling, it is especially important to be aware of the new exchange rates. If you are planning a trip to the UK in the near future, it is worth choosing the day when the pound goes down, as we can get a lot of pounds for our forints, so it is also possible to swim at a much cheaper rate than the original design. .