There’s big news for anyone from the US, Europe or Japan traveling to the UK and hoping to make a big ticket purchase….your money buys a lot more this week than it did at the start of last week! At least 2% more to be exact.
On Friday, the British Pound hit seven-week lows after the Conservative Party lost its parliamentary majority in the UK general election. Prime Minister Theresa May, who took power following the UK’s vote to exit the European Union (Read: Brexit…and Bags), called the election in a bid to secure support for her party ahead of the UK’s Brexit negotiations with the EU set to begin next week. But she made a major miscalculation. Her party lost seats to a newly resurgent Labor party, led by veteran pol Jeremy Corbin, who many in the run-up to the election had written off as having no chance of gaining seats. This was supposed to be a slam dunk, but for the second time in a year, political analysts grossly misjudged the desires of the British people, and the currency is taking a hit because of it.
The pound fell almost 3 cents against the dollar, from $1.29 to a low of $1.26, before settling at $1.27. Top currency analysts see a further fall below the previous low of $1.26 as a real possibility if negotiations to secure parliamentary leadership falter. It’s unlikely the pound will rise in the near-term, so if you’re planning a trip, recognize that you’ll be able to make purchases at a 2% discount. We’ll continue to update you on the currency situation if anything changes….
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