Explainer | What does a weaker British pound mean for Asian tourists, students and businesses?

Asian consumers are snapping up the pound across money changers in anticipation of lower-cost holidays and education in Britain

UK-based foreign workers and Asian firms dependent on exports to the UK will feel the pinch of a weaker pound

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Pedestrians pass a pound store in Liverpool. Photo: Bloomberg

Published: 5:47pm, 30 Sep 2022Updated: 8:49pm, 30 Sep 2022

The impact of the British pound’s plunge has reverberated across Asia, presenting opportunities but also posing some challenges for consumers and businesses in the region.

The pound fell by as much as 5 per cent against the US dollar to an all-time low of US$1.0327 on Monday, triggering alarm in financial markets over new Prime Minister Liz Truss’ emergency budget measures unveiled last week to jump-start the country’s ailing economy. On Friday, it rebounded to levels last seen before the budget, but analysts are expecting continued see-saw trading in the coming days.

Some consumers across Asia are rushing to make the best of the volatile exchange rates – looking towards cheaper holidays to Britain and buying more pounds at lower rates.

But the dwindling value of the pound could weigh on the personal finances of the UK-based Asian diaspora and on businesses with exposure to Britain.

A woman walks past a sale sign in a shop window in London. The pound’s slump has prompted a rush of interest in Asia to snap up the currency in anticipation of cheaper holidays and education in the UK. Photo: Reuters

Happy tourists, students

Money changers in Asia have seen a rise in the number of people snapping up the pound to “save money or for travel to the UK”, said an employee at People’s Corner Money Changer in Singapore who also called the move a “smart decision”.

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