Brexit Leads to Record Losses For Pound Sterling
With Brexit still looming over the UK, and the end of Theresa May’s leadership putting the country in yet another stage of transition, the pound has endured its longest losing streak against the euro since the creation of the latter currency 20 years ago. In recent weeks, the sterling has recorded its steepest losses ever when compared to major world currencies.
The pound dropped from just over €1.17 to under €1.14. It fell from over $1.32 to less than $1.27 versus the dollar – its lowest level since February.
Financial markets have declined over the past month over US and China trade war fears. Donald Trump’s administration raised the stakes by ramping up US tariffs from 10% to 25% on $200 billion worth of Chinese imports. Tensions raised as the US blacklisted the Chinese telecoms company Huawei. The FTSE 100 has fallen by more than 2% to trade at about 7,270.
UK inflation increased to above the government’s 2% target in April. Last week, U.K. Prime Minister Theresa May resigned as the leader of Britain’s Conservative Party.
“It is and will always remain a matter of deep regret to me that I have not been able to deliver Brexit,” said May outside No. 10 Downing St. in London during a speech at the end of which she shed a tear. May spent nearly three years trying to deliver the result of the 2016 Brexit referendum.
The Bitcoin Brexit Boon
According to one expert, increasing numbers of millionaires in the UK are moving their cash into cryptocurrencies, such as Bitcoin, due to fear over the possibility of a Jeremy Corbyn-led government.
With Conservative Party support waning thanks to Brexit chaos, a Corbyn-led Labour Party could take power. Nigel Green, founder and CEO of deVere Group (which has more than $12 billion under its advisement), believes the nation’s rich, fearing such a result, are turning to Bitcoin and Ethereum.
“High-net-worth individuals in Britain and wealthy international investors with UK assets and business know that they will be hit by Mr. Corbyn’s tax hikes on wealth, income and inheritance,” Green said. “As such, many of them aren’t waiting to find out how his anti-wealth rhetoric would play out, and more and more of them are seeking advice on established, legitimate overseas opportunities to create, build, and importantly, protect their wealth.”
He adds: “An increasing conversation we’re having with clients in this regard involves investing in cryptocurrencies, such as Bitcoin, Ethereum and XRP, in lower tax, crypto-friendly jurisdictions. In a broader sense, high-net-worth individuals are increasingly seeking exposure to the associated benefits of these digital assets as our recent global survey highlights. It can be expected that a Corbyn-led government will help fuel this trend.”