In our previous article we mentioned the new Prime Minister’s proposed mini-budget, which includes a slew of tax cuts and changes to ease the crisis in national life.
In fact, the rise in interest rates has made a large number of overseas investors wary of the pound after the official announcement.
However, any fiscal changes will also directly affect the day-to-day lives of UK businesses and individuals.
In this article, we have gathered comments from major mainstream media to introduce you to the possible impact of the plunge in the pound.
High Prices Caused by the Pound Slumps
It is well known that the United Kingdom imports a large number of goods every year to ensure the diversity of the market.
After the pound depreciates, it will definitely affect the price of imported goods.
This includes higher costs than before for British companies to import a variety of goods from overseas.
However, in order to keep profits constant during tough times, customers will pay higher prices for goods.
Pound Slumps Make Travel More Expensive
If you decide to travel abroad during this time, it must not be a definite decision.
Sterling can be bought for less than a euro or a dollar at an international currency exchange office, which means that vacations abroad are now more expensive.
Simply put, your out-of-home lodging and shopping may cost you more than usual to enjoy “depreciated” services.
Ticket prices may also be affected if you are flying with an airline that is billed in GBP.
Conversely, a falling pound could attract more overseas tourists, which is good news for the travel industry.
Pound Slumps, Mortgages Rise
Although there is no word from the Bank of England to raise interest rates again after the mini-budget, it is clearly only a matter of time.
Banks are raising interest rates to encourage people to borrow less to reverse the current inflationary situation.
Some homebuyers who plan to take advantage of home loans may face higher loan rates and stricter financial scrutiny.
However, users who have already applied for a mortgage will see a further increase in the monthly payment amount.
Energy Costs Increase
As one of the main commodities imported by the UK, oil is denominated in US dollars in the international commodity market.
And the latest GBP/USD exchange rate has hit new lows, which will make you pay more for fuel.
Providers are likely to face further pressure from the £2,500 freeze on household energy bills.
In contrast, oil prices are more worrying.