To be concerned about the pound dropping in value?

[Givemepinkgin]

So I’m feeling uneasy seeing how much the pound has dropped in value on the news of lately.

Admittedly I’m not hugely financially/ politically savvy and while I feel uneasy, I’m not sure what effects this will have… I’m wondering if someone can explain in simple terms to me how the pound dropping in value is going to effect everyday people like me in the uk?

Am I being unreasonable to be concerned?

I think YABU to suddenly be concerned now rather than after the Trussterfuck budget weeks and weeks ago.
Mostly it’s going to mean things from outside the UK cost more.

Do keep up the pound is now $1.21. it is the highest it's been since August Liz truss is a distant memory to the financial markets now.

Everything we buy from abroad becomes more expensive.

The cost of things when we go abroad on holiday is much higher.

It is the cause of some of the inflation you are seeing now. Everything the UK imports is now more expensive as the pound is weaker than other currencies. So food, clothes, cars, electronics, building materials etc are all up in price. It’s not the only reason (global increases in energy driving most price rises) but a good bit. Look at what you buy and see how much if that is made in the UK.

Going on holiday abroad will automatically be more expensive now as your sterling won’t but as much accommodation, meals etc as it used to.
it sucks but that’s how it is.

Huh? Am I looking at a different market to you? The pounds been climbing slowly but steadily for weeks now.

It means we are all poorer and we are importing more inflation since things like oil are priced in USD. Based on fundamentals of our economy most economists believe that sterling is overvalued so don’t expect it to rise in the medium to long term in fact it is likely to fall further. The Truss debacle caused a shock but really it’s about the prospects for our economy and the fact that we will continue to borrow to fund benefits such as pensions for an ageing population and healthcare etc, rather than borrowing to fund investment that will make our economy more productive. In a nutshell: economic decline

This. It's stronger against the dollar than it has been in a while.

Utter nonsense, the only reason the £/$ has improved is because the Fed has indicated interest rate rises are coming to an end, £/euro still poor.

The financial impact of Truss is an emergency mini budget and £55bn of cuts and tax rises, she added £30bn to the nations "black hole" remember in the spring, less than 6 months ago, Sunak had a £25bn surplus.
Billions in Gilts were traded at huge losses, during her time as PM too & is still to work through pension funds.

You and the Tory media might like to pretend its all over but it isn't, she caused a great deal of economic damage.

But that doesn't fit the anti Brexit Tory bashing that mumsnetters love to indulge in.

The modest upswings lately (still significantly weaker than eg 2022 where it averaged c1.4) are largely due to the perception of less crazy government and the interest rate rise. The problem isn’t going away.

Apologies that should read “2021”

Brexit has knocked 4% off GBP. That will inevitably have an impact. It’s obtuse to argue otherwise.

It dropped briefly during the Truss era but then picked back up with Rishi.

Sure it's recovered from the mess that was Truss, but it's still down on what it was in January of this year. It's been pretty crap since the Brexit vote tbh. 🤷🏻‍♀️

Yes this exactly… It’s crazy the pound is now worth less than the dollar 😮

It isn't it's crazy you can't read an exchange rate graph. One pound buys 1.21 dollars

@Givemepinkgin I think you're getting the rates confused

Having the pound drop can also have short term positives. It can attract foreign investment because their currency goes further here and can help to provide a boost. It also means British products are much cheaper for foreign buyers and this can be very good for exports. There are downsides too but there are plenty of others pointing those out.

Haha ok blonde moment 😂… Well I guess the situation isn’t as bad as I thought!

Panic over 😁

Companies don't invest based on a transient exchange rate, hence why FI in the UK has dropped considerably in recent years.
Do you think UK manufacturers can just turn up or down production and negotiate/find new export markets based on an exchange rate?
Plus as the UK has few raw materials, manufactured goods go up in price as the £ falls.

If a falling currency was an indication of a healthy exporting nation, the UK would be europes manufacturing giant - but its far from that.

The £/$ isn't the worlds only exchange rate either.

I guess it could help imports… if only we were still able to seamlessly trade with the worlds wealthiest single market, just 20km from our shores.

As for foreign investment. Why would people see the U.K. as attractive? The only industry we were leading in is banking/finance and brexit is killing that. Otherwise we are an ageing population with a structural productivity problem. I suppose we are good at selling overpriced housing to each other.

Not meaning to sound snarky, genuinely sad.

Is anyone pro Tory anymore given that they've wrecked the country? Even dyed in the wool, True Blues have turned their backs on them.

Strong pound means cheap imports and cheap holidays overseas but means it's more expensive for other countries to buy things from the UK.

Weak pound means the opposite, it's good for our exports and for tourism into the UK, but bad for us buying from overseas.

The pound is stronger against the dollar than it has been recently, we're back to the around the level from when Boris Johnson resigned. Based on historical standards it's very low but has been on a persistent decline since the highs of 1 GBP buying over 2 USD that we had before the 2008 financial crash.

This lot aren't Tories they are red in a blue coat. True Tories wouldn't interfere in the market i.e. help to buy or energy cap, they wouldn't have locked down as they value personal responsibility and splunked billions on furlough, they certainly wouldn't allow 504 thousand net immigration. They wouldn't run down the armed forces. No these aren't Tories so I'm not their biggest fan. I just don't blame them for everything like the left do