Why Is The Pound Still Failing?

Financial studies show that the sterling is in free fall. The pound is still trying to recover over its worst fall since 1985 (lowest level against the dollar). The Bank crisis and Britain’s increasing debt has managed to scare financial advisers but also the sterling, which has gone in to hiding. By simply analyzing what was happening in the same period last year, we can say that the economic crisis is far from being over.

The falling pound is not only worrying the British but also some of the richest countries in the world. So much so that the sterling was on the agenda of the G7 summit. Finance ministers all around the Europe are facing some troubled times but if they cannot count on the power of the Euro and the Sterling, then all fights are as good as lost. This is why the French finance minister has asked the Bank of England to start supporting and backing up the pound.

The last performance of the pound is actually said to have been worse than that in 1985, when Ronald Regan’s economic boom triggered the dollar to rise. The reality is that Britain’s recession is also the cause of the weak pound which is left to struggle in these financial troublesome times. Investors have also stared to be worried as it seems that the public debt is soaring which can lead to a downgraded credit rating , determining the Government to borrow more money at a more expensive rate.

With the recent troubles regarding Greece’s almost declared incapability of staying afloat we can say that the future of the sterling is indeed looking very gloom. The high unemployment rate, the increasing debt and the fact that more than one European country has its economy shattered is putting high pressure on the pound, making it virtually impossible to recover to the way it was.

Outside investors fear that the British economy is going to be profoundly affected by the economic turmoil that has taken over Europe. The latest rescue package instead of reassuring people and investors alike has only increased worries because of the bank shares that are tumbling. Also, big time investors are urging people to sell their sterling savings in order to mange to save some of their wealth.

Europe is facing some hard times ahead and all of this can be seen in the economy reports that are beginning to look more and more like horror tales. Without a good rescue plan, all bets could be off as far as the pound is concerned but there is still a chance so all we have left is hope for the better and start investing in something more reliable.