The Brexit decision shattered investor confidence and in the aftermath of the decision everything from sterling to stocks had been in for a bumpy ride. Further economic damage settled in the next morning after the results had been released, as investors abandoned the pound even more. The world was also shocked as Prime Minister David Cameron declared that he will be stepping down from his post come September. Scottish Prime Minister Nicola Sturgeon also hinted on the possibility of a Scottish referendum to declare independence from Britain. Furthermore, a vote of no confidence had been issued against Jeremy Corbyn, a political leader of the Labour party, leaving the UK political scene in a state of disarray.
Saying that, there are positive aspects to Brexit though and Britain would likely trump financial doom-prophets in the long run. This can be seen in the positive light of Cameron’s resignation speech. Quoting part of his speech “I said before that Britain can survive outside the EU and indeed that we could find a way”.
The British Pound has been on a downhill slope with the decision taken to leave the European Union. This decision came as quite a surprise to most, as polls indicated that Britain was all set to remain part of the EU. However, this has certainly not been the case, as this news sent the pound spiralling downwards at a fairly sharp rate. If that wasn’t bad enough, even the euro has taken some losses to its more successful peers like the US Dollar. Analyst forecast that this downward movement would likely last for some time, as investors would be wary of investing in Britain before Brexit influences had subdued and the economic climate has stabilised once again.
At the moment, no Article 50 announcement has been made, so this still leaves Britain with some power to influence its own destiny. It would likely not nullify the referendum, as doing so would only serve to worsen the economic climate by creating political havoc within the country itself.
Speaking on the euro further, it did perform better aftermath of the referendum offering a strong run against the pound. In other forex pairs, the euro had however suffered some losses due to investors seeking a safe haven for their capital. Once Article 50 has been called into power it remains to be seen what the European Union will do, since negotiating power would then be in their hands, putting them in a much better position to influence economic decisions, without the input of the UK.
Future forecast for both currencies
Direct future results will likely be influenced to a great extent by the continued ramifications of the referendum results, although other economic announcements could have a significant impact. These announcements could be made by either Britain or the European Union itself. The Scottish independent poll could also play out to have an influence on both the pound and the euro, with the impact on the euro being less severe. Spain’s general election would also likely have an impact on the Eurozone, influencing this currency.
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Alexander Bowring is a London based writer and a Southampton Solent University Screenwriting graduate. He has worked alongside TV personality and Telegraph feature writer Alison Cork, whilst also having produced content for ITV, This Morning, Canvas8, Who’s Jack, Alison at Home, and Bonallack & Bishop Solicitors. Alexander also has a keen interest in investments.