Pound Falls as Probability of Hung Parliament Becomes More of a Reality

Brexit is doing the British pound no favours, it seems. While the pound rallied a little during Monday’s trading session, it then fell as the nation’s polls showing a growing probability that the upcoming December 12 UK election will end in a hung parliament.  Polling experts are of the opinion that British Prime Minister Boris Johnson will need the Commons to receive a lead of at least six points in order for him to be able to pull of his Brexit deal in January. Mr Johnson’s Conservative Party saw its lead over Labour shrink to 9 percent in the last week but it still remains the front runner. At the time of polling, sterling was down 0.3% at $1.2907 - 0.2% weaker at 85.34 pence against the euro. The uncertainty surrounding the Brexit deal - and whether the UK will ever move forward with it - has been hurting the British economy for some time now. The nation’s economy is growing at the weakest pace it has since 2010, and the Confederation of British Industry has been forced to downgrade its financial growth forecasts for next year in the confidence things will not improve in the near future. In fact, the UK has narrowly avoided a recession in this last quarter, with official figures revealing that the UK returned to growth between July and September,  after a drop of 0.2% in the months leading to the end of June. Technically, a recession is defined by two quarters of negative growth in succession. 

Ian Stewart, chief economist Deloitte, said the UK had given a “respectable performance” in recent quarters given recent economic pressures but that the overall outlook for the Pound - and the country - was not good overall. “This is a pretty respectable performance, given the headwinds from the global slowdown, protectionism and Brexit uncertainties,” he said. “But with businesses focused on cutting costs, wages and jobs are likely to come under pressure. The outlook for 2020 is for more subpar growth.”

At the same time, there are reasons for those who invest in biticon to celebrate. The online cryptocurrency is projected to soar to £1 million, in what is deemed a major crypto boost following the successful playing out of Brexit. Crypto expert Josh Riddett, CEO of Easy Crypto Hunter, made the prediction in the understanding that investors seek safe havens for their money in times of uncertainty and when the market is volatile (which it most certainly is during Brexit) - and bitcoin is considered an international safe haven. Just last month, bitcoin was trading at £7,149.74, meaning a £1million target would have a phenomenal impact for investors. Bitcoin - surprisingly, considering the nature of the currency - is simply not failing. It currently has value, will continue to have value and may be the centre of value in a new, decentralised global financial system. 

Is bitcoin the answer in times of economic uncertainty? At this stage, it is looking like it quite possibly is.