The pound sterling has not made any meaningful recovery and continues to struggle as it remains at a three-month low, as reported by Reuters.
The weak performance of the currency looms ahead of the Bank of England’s meeting, set to take place this week, on decisions regarding their interest rates.
It is expected that the country’s central bank will make one final quarter-point hike of 25bps or up to 5.50% for the current hiking cycle, with no indication of a rate cut until next summer.
Andrew Bailey, the governor of the Bank of England, had told lawmakers in the UK earlier this month that the rates were “much nearer now to the top of the cycle” and that “the BOE is pretty close to ending its cycle of interest rates hikes according to current evidence.”
At the same time, the UK’s inflation rate has fallen from a 41-year peak of 11.1% in October last year to 6.8%. But, it still rates as the highest among major economies and any progress made to bring it down has been slow.
How does this affect Malaysians?
If you’re an investor who holds international assets, there is a chance of this having a negative impact on your investment portfolio.
However, having a diversified portfolio to manage your investment risks can soften the blow of the weak performance that the pound sterling is currently experiencing.
Beyond investing, a weak currency could discourage UK travellers from visiting Malaysia as an affordable and attractive holiday destination, which could impact the local tourism industry.
On the other hand, a stronger Malaysian currency could also mean that travelling to the UK will not be as expensive.
Intend to travel more at the end year? Make sure you have the best travel insurance to protect you during your holidays.
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