If you are reading this and earn your living in UK currency, you are already poorer today than you were before June 2016. And you will be poorer by the end of the year if a no-deal EU exit comes to pass. If you have savings in sterling, then you’re in even more trouble.
In the post-truth world we have been living in for the past three years, there’s one thing that cannot be blagged away, cannot be accused of bias, cannot be propped up by a gust of groundless optimism – the British pound. It is quite literally a sovereign, bowing to no ideology or political pressure. As elegantly and neutrally as a force of nature, it rises and falls as it divines the direction of the country’s economy. That direction, according to the pound’s nosedive over the past few weeks, is downwards.
You might not yet have noticed what economists call “the pass-through effect”, the impact of changes in the exchange rate on domestic prices for traded and non-traded goods. But it is here. We are all experiencing it now, in some way. It’s not just holidaymakers, many of whom are shocked that they are getting fewer euros than pounds at airport exchange bureaux or ATMs (in the past week, even dollars were informally trading at parity, a significant milestone in the pound’s depreciation). » | Nesrine Malik | Sunday, August 4, 2019
