Economy

Another drop for the pound

falling pound
Flickr/Creative Commons

The pound falls below €1.10 for the first time since March 2010

The British pound took another nosedive on Monday, falling nearly 20 percent against the US dollar since Britain voted to leave the European Union.

Further, bad news hit Britain as the pound fell below €1.10 for the first time in six and a half years, during trading on Monday.

It’s one dilemma after the other, just last week the British supermarket giant Tesco reportedly declined to yield to Unilever’s requests for a 10% wholesale price increase in its products which includes British quirky Marmite and Pot Noodle to offset a drop in sterling. Though Unilever later confirmed the supply situation with the retailer was successfully resolved.

The breakdown in the pound is set to lead to higher prices for imported goods, a development that looks destined to put pressure on UK consumers.

Analysts’ forecasts see the pound slipping lower towards the end of the year as more concrete Brexit plans could weight on its recovery.

Since the referendum in June, the pound lost almost a fifth of its value against the dollar and is the worst functioning currency in the world this year. It has continued to face pressure since a so-called flash crash two weeks ago saw it take a 6 percent hit in two minutes.

US rating agency Standard & Poor’s warned the pound might be pulled out of the International Monetary Fund’s elite basket of reserve currencies if UK fails to secure full passage to the single market as it plans to negotiate its way out of the EU.

(£1 = $1.22, £1 = ৳96.32)

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