Qualified advisers answering your
Financial Questions
call 0800 092 1245

How Does The Exchange Rate Affect You?

The sterling / dollar exchange rate has always been a very important factor for UK businesses with a vast number of UK based groups trading with the United States. While the fall in rates will see exporters licking their lips in anticipation of a more competitive trading environment, it is a different scenario for those goods which are imported.


If a UK company exported goods to the value of £200 when the sterling / dollar rate was $2 to the pound then the cost would be $400 in the US. However, now that sterling has fallen to $1.86 this means that £200 worth of goods would only cost $372 in the US - giving the exporter a very competitive edge.


On the other hand the problem is really with imports where a US item with a value of $400 would have cost just £200 when the rate was $2 to the pound, it will cost £215 using the current exchange rate of $1.86 which is a 7.5% increase. More expensive imports will also contribute to the inflation rate, something which the Bank of England is already struggling to contain.

That in essence is how the currency market affects you and the UK economy.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details