The current rate of the pound is 3.97 to a dirham, which is the lowest in recent history. Against the US dollar, the pound has plummeted to its lowest level since 1985. This is attributed to the government’s economic plan, in a battle against inflation.
Governor Andrew Bailey warned that UK falling into recession this year is seemingly inevitable, as the war in Ukraine continues. The impact on energy prices by the actions of Russia is a strong factor of economic impact.
It is expected that the UK economy will continue to fall through 2023, based on current analysis.
The energy prices in the UK rose sharply and increased further as gas supplies to Europe were affected by Russia’s decision to cut supply.
The interest rates were hiked amid soaring prices, in an attempt to control adverse effects.
The value of the pound is also under pressure due to the strength of the dollar, with experts fearing that the pound could now be heading for parity with the dollar.
UAE residents and UK taxpayers are taking advantage of an unfavourable situation with favourable exchange rates, to send money back home. Exchanges in the UAE have recorded an increase in the number of remittances to Europe, as a result of the low rate.
The rates could however, have an adverse effect on soccer fans visiting the region for the FIFA World Cup, which is set to start in November.
The tumble is leading to speculation the Bank of England will have to hold an emergency meeting to raise rates, as reported by Reuters.
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