In the run up to Brexit the pound has suffered from political uncertainty and whether a deal will go through. This roller-coaster ride is partly due to the dissatisfaction for the Brexit deal shown by Theresa May. The uncertainty grew when PM May suffered a historic Parliamentary defeat. The pound now continues show volatility mostly because of the concerns for a no deal scenario.
Even though the Great Britain Pound started 2018 as a top performing currency the ongoing brexit uncertainty has only fueled more turbulence.
According to the latest statistics from the Office for National Statistics, the GDP of United Kingdom grew by 0.6% from the period of June to September, which is a direct increase from the 0.4% growth of the previous financial quarter. However, zero percent growth in September sums up the economic uncertainty UK is Facing. Business investment fell by 1.2% in the third quarter, suggesting that concerns over Brexit may be causing businesses to delay investment decisions. Brexit may be causing businesses to delay investments as shown by the decrease in business investments by 1.2% as shown by the ONS.
Experts predict that the GBP will fluctuate even more despite the recent good performance. Although sterling is weak at the moment because of all the constant rise and fall, more clarity regarding the Brexit will only cause the value of the Pound increase gradually as in this scenario, political stability is directly proportional to the value of the the currency of that certain region.
However, with so many hurdles ahead, it’s impossible to predict how sterling will react. Anyone making foreign-currency transfers in the next few years will have to be prepared for sterling volatility.