Following the European Central Bank’s announcement that interest rates would be held and policies unchanged, GBP fell against the Euro at €1.127, a decline from €1.132.
Although rates are at a record low, it has been noticed that there is a less economic growth within the Eurozone.
Analysts had already predicted the move, as well as the ECB’s asset purchase schemes coming to an end this year.
The growth is the slowest in two years, and there have also been tensions between the EU and Italy regarding Rome’s budget.
ECB President Mario Draghi predicts that inflation will rise towards the end of the year.
Theresa May Wins Over Critics
Brexit has been a large contributing factor towards the fluctuation of the GBP exchange rate, but former minister Amber Rudd stated that Theresa May was said to have won over backbench critics thanks to an “emotional and personal speech” following a feeling of no-confidence.
However, some remained a critic, stating that the meeting was stage managed. They were also angry that there had been a refusal to rule out the 20-month transition period that would follow Brexit.
The transition period is set to end by 2020, and the Prime Minister insisted that if an extension is required, it should be longer than a few months. The prospect of an extension has previously been discussed at the summit in Brussels.
The European Council president Donal Tusk advised that If the United Kingdom felt an extension was necessary that leader would consider it, despite a meeting scheduled for November 17th being postponed.
Retail Companies Take a Tumble
Despite retail being responsible for the rise of GBP in recent times, not every company has been fortunate enough to reap the benefits.
Debenhams recently announced its plans to close 50 stores over the next five years. The move follows tough trading years and emerging changes in a volatile sector.
Brexit will continue to impact the value of the GBP, despite talks almost being complete. The close of known retail stores not only means loss of jobs but also means reducing spending.
As has been the case for some time, nobody knows what the outcome will be in relation to Brexit, and the impact it will have on the United Kingdom overall. The press also remains critical of Theresa May, accusing of her worsening and complicating Brexit, as well as changing the rules over time.
Pound sterling will face some choppy waters, but as the outcome is unknown, it’s unfair to say that the outcome will be doom and gloom, but the uncertainty is enough to cause panic and lessen the value of GBP.