British pound will fall fast and far
By UK CreditCards.com
Credit card customers planning overseas trips could soon feel the effects of a marked deterioration in the value of the pound, if new industry analysis proves correct.
According to a report from Stephen Hughes, director of Foreign Currency Direct, there is a consensus among currency investors that the value of the pound will fall "fast and far" in the future.
This trend would lead to the cost of sterling-denominated goods and services bought overseas through credit cards becoming much higher than before.
Spending on UK prepaid credit cards denominated in another currency, such as euros or dollars, would suffer in the same way due to the changing exchange rates.
Mr Hughes pointed out that a combination of factors, including fears over the UK's public debts, were likely to lead to further weakening of the pound. This is because declining investor confidence in a nation's financial prospects generally leads to its currency falling in value.
"Servicing the national debt now equates to £1 of every £4 spent by Gordon Brown's government and 57.5% of the country's annual output," Mr Hughes added.
The pound hit an all-time low of €1.02 against the euro last December and a 24-year low of $1.35 against the dollar in January 2009, but has since recovered to reach €1.104 and $1.633.
Published: 23 September 2009
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