It gets knocked down, but then gets up again, and you can’t ever keep it down. The Great British Pound is one of the world’s most robust currencies, but what does the future hold? Let’s take a deeper dive into the GBP and look into the economic tea leave to try and find the answer.
Brexit, Covid, Ukraine, and Global Inflation
There is a lot for the Great British Pound to be worried about. Since the Brexit vote results, a question mark has hung over the head of this once great currency. No one is quite sure what the future holds for the GBP. Added to the global problems of covid, the conflict in Ukraine, and the inflation that sweeps the globe, there is also uncertainty in number 10 Downing Street.
The political situation in the United Kingdom has had many negative effects on the country, overlooking the effect it has had on the currency. Three Prime Ministers in three months is not a good look for a supposedly stable democracy, and this instability has hit the pound hard.
The immediate outlook is not great for the Great British Pound. The saving grace is that it is not the only global currency that is facing an uncertain future. The markets have been up and down and around and around. No one can be certain what is around the next corner on the foreign exchanges.
There are always opportunities for Forex traders. The ups and downs have been beneficial to their balance sheets if they can make the right predictions. Forex trading in Kenya has become a popular side hustle. Monitoring the markets and identifying opportunities on apps make trading quick and simple. The ups and downs have not been beneficial to the British consumer, however.
Prices have been increasing because of increased energy and transportation costs, while the value of the money used to buy products and services has been losing value. British consumers are paying more, often for less.
Rishi Sunak, the new British Prime Minister, has a mammoth task on his hands. It is only rivalled by the mountain that the new Chancellor of the Exchequer, Jeremy Hunt, has to climb. The mini budget has been abandoned, but what will be put in its place?
This long-term uncertainty is a blessing in disguise. At the moment, anything can happen. This means a recovery without a recession or austerity is possible. With a well-thought-out budget, the right cuts to spending, and an economic plan that not only acknowledges Brexit but builds on it, can save the pound from falling further in value.
Both Hunt and Sunak are experienced businessmen and investors themselves, so there is light at the end of the tunnel. How long it takes to get there will not be known until the new government announces their plans and is given a chance to make them work.
It is hard to look too far into the future right now, for all currencies and economies. What we do know is that the British are resilient people with a resilient currency. It is hard to bet against the pound in the long term, but the short-term volatility creates lots of opportunities for Forex traders to profit.