Britain's Deficit Weighs Down the Pound

MIN READMar 28, 2016 | 08:45 GMT

The value of the British pound has been dropping since the beginning of 2016.

(SHAUN CURRY/AFP/Getty Images)

The British pound has been on a downward slide since January, a departure from the currency's relatively strong growth over the past few years. The markets have been gradually accounting for the risk posed by the United Kingdom's potential departure from the European Union, which was detailed in a Goldman Sachs report released in February. According to the U.S. investment banking firm, a vote in favor of exiting the bloc in the United Kingdom's June referendum would immediately send the value of the pound plunging by about 20 percent. The sudden, steep drop would in turn cause serious problems for the United Kingdom, which would find it more difficult to pay for the imports upon which the country is so reliant. Though Stratfor does not expect the United Kingdom to leave the European Union, and therefore does not predict Goldman Sachs' scenario will come to pass, the report highlights an important...

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