UK is reeling under the effects of recession and isn’t showing any signs of recovery, in the near or the far fetched future. The British currency is at an all time low having depreciated by almost % in years. Its plummeting at a rather high rate after the news results of the rising UK national-debt started pouring in from all quarters.
Pound stands currently at $1.3793 after registering a 1.1% decline against dollar yesterday. The current phenomenon is giving nightmares to investors and entrepreneurs around the globe. While it makes UK the hot-spot tourist destination, for the people back home in UK foreign holidays have become more expensive. Looking through the annals of history, this is the lowest the pound has reached in the last four years, breaking through the $1.40 benchmark (just enough to leave impact the people and economy psychologically). Add to it, that it’s not losing against dollar but other major international currencies via, rupee, yen and euro, etc.
Previously the downslide was looked upon as an effect of recession which all the major currencies are going through. It gained momentum over the past couple of weeks mainly due to loss in credit-worthiness of the nation and currently due to the mounting national debt. It will only worsen as the government plans to absorb the bad debts of other retail banks. The IT-Telecom sector of other nations which mainly take up outsourcing contracts are losing a lot of money due to this. Even if an insurance cover is in place, it won’t be sufficient to cover all the losses. What else? Well the obvious is happening. More and more people are selling off their pound holding. The cost of living is rising in the country and the time will come when the people will find it difficult to fulfill their basic needs. To prevent this government interference is of utmost importance. Strategic and quick actions have to be taken towards strengthening the currency.
