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Pound sterling drop: What does it mean for you?

The Independent's Economics Editor, Ben Chu, explains how the falling pound will affect you

Ben Chu
Economics Editor
Monday 31 October 2016 09:09 EDT
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What does the falling pound mean for you?

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Sterling has taken a mighty pounding since the Brexit referendum on 23 June.

On the night of the referendum the value of the UK’s currency plunged by 11 per cent against the US dollar – its biggest intra-day fall in modern history.

And the pound has been on the slide again since the beginning of October in the wake of Theresa May’s pledge to commence the UK’s official EU divorce proceedings by March 2017.

Sterling currently trades at almost 20 per cent below its level on the eve of the referendum.

Some economists and pro-Brexit politicians say sterling was overvalued going into the referendum and that this depreciation is a natural, even welcome, correction.

But most economists judge the slump reflects a new pessimism among financial traders about the economic prospects of the British economy due to the Brexit vote.

And many suspect the pound may have even further to fall in the months ahead.

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