The UK Could Be In Financial Doldrums For Some Time Yet
Posted by Allison on 20 April 2009, 11:29
It’s been a real struggle for the British pound – and indeed the British economy as a whole – just lately. Ever since things started to go downhill in 2008, there have been precious few weeks where any good news regarding the pound and the economy has come to light.
And unfortunately, it could be some considerable time yet before we see any improvements. Some have said we could be ushering in London’s chance to host the Olympics before we actually get any news worth celebrating.
In times like this it does pay to read articles and news stories that are packed with easy to understand information. The financial markets and their ups and downs can be tricky to understand at the best of times. But thanks to articles such as this one on the BBC website, which further describes the problems we could be facing for another three years, it is much easier to understand what is going on. You can read the article in full at this link.
The depth of the problems the UK is facing is mainly why the pound is suffering so much against many other currencies. If you take a look at how it has performed against these currencies over the last year, you can see how bad things have become.
The drop against the US dollar is perhaps the best charted of all the currency converter comparisons. Let’s look at the 22nd July 2008 as a benchmark, and compare the most recent rates to those on that particular day. Back on that date last year the pound could claim 2.0060 US dollars. On the 9th April 2009, the day before the markets broke up for the short Easter break, the exchange rate was way down at 1.4676. And it has been lower as well.
But what about going up against other currencies? Well on that same date last year the pound was claiming 1.2601 Euros. It has done better since then, claiming 1.2959 at its highest point, but it was on 1.1057 as Easter finally arrived in 2009.
The picture is very similar against the Japanese yen. Back on 22nd July 2008 the pound could lay claim to 213.294 yen for every pound handed over. Today that figure is way down to 147.114.
Wherever you go you can see a similar picture – at least, in most places you can. In Australia the pound bagged 2.0520 on the 22nd July last year, and 2.0560 just before Easter this year. And yet the high point between these two fluctuating currencies was 2.5872 on 13th October last year. A strange result given what we have seen occur elsewhere, but it does show that for all the results that are broadly the same, there will always be some to throw you off.
So it seems that we could look ahead to several more years of rates like these if the reports are to be proved correct. New Zealand has had a similar time against the pound. The pound claimed 2.6307 New Zealand dollars on 22nd July last year, and it is now 2.5293. That is still significantly lower, but not at the highs of 2.8787 we saw last year.
So brace yourself for more low results until 2012, as it seems like that is the way things are going.