danieldwilliam: (electoral reform)
[personal profile] danieldwilliam
For those of you watching in black and white the pound is now at its lowest level against the US dollar in 31 years, trading this morning at $1.2757.

That's below the value it touched just after the EU Referendum result.

This isn't a result of Brexit. This is a result of us *talking* about Brexit. My guess, for what its worth, is that if we ever get round to actual Brexit we'll see the pound worth more or less one US dollar. Its high over the last twelve months was 1.55. Dollar parity would see the pound worth 2/3rds of its value a year ago.

You'll start to see this in inflation figures over the next few months. The next Bank of England quarterly inflation report is due on the 3rd of November and this will be the first one where the whole period is after the referendum and the fall in value of the pound. Anything that is imported, anything where large parts of the components are traded in dollars and anything involving lots of oil will get more expensive.

The FTSE 100 share index, made up of large multi-national firms, so not really a great measure of the UK economy, rises to a near record 7,000 points. It is traded in pounds. In dollars, it's down 2% this year. Basically people with dollars are taking their valuable dollars and buying cheap pounds to buy shares in FTSE 100 companies at a bargain. Apply the same logic to other UK stock indices.

If you are able to negotiate yourself a payrise now might be the time to start. Or if you're a pensioner with a triple locked pension and investments in the FTSE 100 sit back and crack open a bottle of English sparkling wine.
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