If you live in the U.S., now might be the perfect time for a trip to London. The pound is at a seven-week low against the US dollar. On Oct. 26 the pound was at 1.2777 dollars, its weakest since Aug. 20.
Paranoia over Brexit, the future of the British economy without Europe, has pummeled the British pound lately, taking it to levels not seen since last year, according to Barron’s.
“The longer Brexit talks drag on, the more the private sector will have to prepare for the possibility of Britain tumbling out of the bloc without an agreement on future relations,” European Central Bank President Mario Draghi said on Thursday.
Investors don’t know the exact driver for the pound decreasing in value, but they warn that with less than half a year before Brexit day, a no-deal outcome is seeming increasingly possible.
“Prime Minister May is said to have had a positive meeting with the 1922 committee yesterday, but that has only slightly reassured traders,” said David Madden, market analyst at CMC Markets.
Failure by Theresa May to agree a deal with Brussels before Britain’s formal departure date on 29 March could trigger a sharp drop in the value of the pound and other wide-ranging negative economic consequences, according to analysis published this month by the Office for Budget Responsibility, the government’s tax and spending watchdog, writes The Guardian.
However, the situation of the falling pound may not wholly represent the economic strength of Britain, even in these years following the Brexit decision. Historically, the European Union has made many a deal in the eleventh hour, and some believe this will again be the case with Brexit. Of course, this means there could be a lucrative opportunity for those that want to bet on the pound.
For now, the low pound is great for U.S. travelers. See our special fares in the left column.