The pound is the topic on everyone’s list recently. Due to the Brexit vote last year, Theresa May’s conference speech in October and the announcement of the snap general election. However, it is not just the UK’s political stance which has had an influence on the pound. From the French election to Donald Trump entering the White House, this has all influenced the strength/weakness of the pound.
On the 18th April 2017, Theresa May announced that UK would have a snap general election. This was a huge shock to the public and MP’s as she stated this would never happen for as long as she is in power. Due to this shock, the strength of the pound rose 1pc.
This snap election has increased the pound; however, it is still very week. Compared to this time last year, the pound is roughly down by 12pc against the Dollar and 10pc against the Euro.
October last year was the real hit to the pound, as markets processed the reality that Britain was leaving the EU, due to the conference Theresa May presented in October.
The level of the pound has different advantages and disadvantages depending on who it is affecting. For example, the price of Gold for exporters has increased from the low level of sterling. Their sales abroad are now worth around an extra 10pc to 15pc once translated into pound.
Nevertheless, there are people who do not welcome the change from the pound. This is most of the population, including businesses which import raw materials, as the cost for them has increased dramatically. Therefore, this is having an impact on the general public as prices are going to and already have increased for day to day products.
Consequently, the pound is at an uneasy stage at the moment. The general election on the 8th June will also play a huge factor on the level of the pound.