The Brexit Impact on the GBP
Brexit is one of the most discussed topics right now where everyone will be affected in one way or another. A team at MoneyTransfers.com compiled an infographic to break down the Brexit impact in a simple and visual manner. The infographic outlines all the major Brexit events and correlates it to the value of the British pound.
Infographic provided by MoneyTransfers.com
The Start of Brexit
The price of the British Pound Sterling (GBP) has been affected by every major development of the Brexit process. The Pound had been resting at 1.52 USD and 1.43 EUR per Pound leading up to the question of the UK’s future. The first major event leading to Brexit started on December 17th, 2015. On the 17th, the referendum act received royal assent, causing an immediate dip in the value of the GBP. When then-Prime Minister David Cameron announced the EU referendum date, one Pound would’ve gotten you 1.50 USD or 1.38 EUR. Since then, the Pound went on to demonstrate a level of volatility that hadn’t been expected. This is when the Brexit process started kicking in at faster speeds.
The Referendum Impact on British Pound Sterling
Brexit officially began in June of 2016 with the referendum. After a majority of British voters voted to leave the EU, the Pound dipped again over the uncertainty of what would happen next. Here, the Pound was worth 1.48 USD or 1.31 EUR. From this point onward, the power of the Pound went downhill. July of 2016 saw the most significant dip in the value of the GBP, stabilising prior to the election of Theresa May. During the months following her victory, optimism wasn’t in the air as the Pound dipped to its lowest values in years. At this point, the Pound was worth 1.33 USD or 1.20 EUR.
Article 50 and the Value of the Pound
The next game-changing event of Brexit came when Prime Minister Theresa May triggered article 50 of the Treaty on European Union. The invocation of Article 50 by the UK marked the beginning of the UK’s formal withdrawal from the EU. While the value of the Pound dropped a bit further during the following weeks, it also showed the first signs of respite as its value climbed up steadily. By the time general elections took place in August of 2017, the Pound was steadily regaining much of the value it had lost during the initial shock of Brexit.
The Brexit Uncertainty
While the political situation in the UK was not particularly stable yet, the Pound’s value appeared to be normalising. The first months of Brexit were a rollercoaster of uncertainty. Of course, the UK would soon have to face the economic realities of the uncertainty that Brexit brought. Further discussions on Brexit continued into 2019, with MPs voting to rule out a “No-deal Brexit” in March. In April, MPs voted to extend article 50 to the 31st of October. Then just one month later, Theresa May announced that she will step down as Prime Minister, at which point the Pound was worth 1.31 USD or 1.16 EUR.
The Brexit Day
After a final debate in Parliament, Theresa May stepped down on the 7th of June to make way for a new leader to deliver Brexit. The big day everyone is waiting for, “Brexit Day,” will come on October 31st, failing any other delays. While plenty of experts are estimating the economic cost of a no-deal Brexit, no one knows for sure what the future looks like for the British economy.
To find out more about the Brexit impact and various industries affected, read the whole article at: https://moneytransfers.com/the-brexit-impact.