Today the British pound sterling sank to its lowest level in two years due to the mounting political issues in the United Kingdom.
As of right now, it seems that Boris Johnson will be the most likely successor to Theresa May as Prime Minister, since he is taking the lead for the chief position within the Conservative Party. A hard Brexiteer from the start, Johnson has stated that if elected to the post of Prime Minister, he will take the United Kingdom out of the European Union at the next deadline (October 31), whether or not there is a deal negotiated between them.
The Bank of England and prominent businesses in the United Kingdom have repeatedly issued warnings to the government that a hard Brexit will be terrible for the British economy, as it would abruptly sever all existing trade relationships with the EU, who is by far the most important trade partner of the United Kingdom. Thus, the prospect of Jonhson’s leadership and his willingness to take the country through a hard Brexit are seriously pressuring the pound. It dropped to 1.2393 against the Amercan dollar and to 1.1047 against the euro.
Moreover, it is expected that the GBP will continue dropping from this point on, perhaps even faster, as Brexit is now three months away and the UK will be under Jonhson’s leadership.
