Does anyone have idea on the sudden decline of GBP against USD in the second half of 2008? How long do you think it will take for the UK to recover to that level?

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kamikazilucas@reddit

its so great that no one has an actual answer to this question and just responds with the obligatory recession answer even though every other fucking country had that same issue yet their currencies didnt collapse like the pound did so it obviously wasn't just that

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Ok-Woodpecker9171@reddit

2008-2009 was the financial crisis....

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Specific-Salad3888@reddit

Op would have found this if they googled what happened to UK on 2008, first answer was recession and goes to explain

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iamamisicmaker473737@reddit

first answer was this post tbh 😀🤣

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ThinkAboutThatFor1Se@reddit

Which in turn lead to the Eurozone crisis that affected Europe. The dollar is the world reserve currency so in an era of financial uncertainty and new financial instruments QE, ZIRP, bailout etc the dollar was seen as a safe haven.

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mrodent33@reddit

test

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No_Dragonfruit_8435@reddit

It won’t

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matomo23@reddit

Did no one tell you about the Global Financial Crisis? USD weakened and then in the following years the UK went down a path of austerity which stunted our grown and caused our currency to flatline or fall.

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Thor-Marvel@reddit

It wasn’t a “sudden” decline. The US started cutting interests rates in 2007 but the UK didn’t until 2008. When the UK started cutting rates they cut drastically.

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UberShow@reddit

I went to vegas when it is $2 to £1. Good times. The pound is weak now and has been for some time. The average rate for decades was 1.40 to 1.70. Maybe once the country gets its act together perhaps we will see those rates but it’s been hanging around 1.20 for years now.

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DiscountRug@reddit

Travelling with the UK pound in the mid 00’s was epic.

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811545b2-4ff7-4041@reddit

I went to the Caribbean on honeymoon in '08.. $2=£1 times and no sales tax on gadgets. That was epic. I'd be happy for us to get back to the days of 1.4 - 1.5 from a few years back.. the USA is so expensive to visit now.

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sbdavi@reddit

The US has really suffered from inflation as well. I moved from there in 2018, and went back last year. I was shocked at the prices... I moved at the right time.

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btrudgill@reddit

I sugest you watch "The Big Short" to get an idea of what happened in 2007-2008.

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TuMek3@reddit

Doesn’t explain the Stirling slump at all?

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Suitable-Length4255@reddit

When the global financial markets are at risk of collapse you buy dollars and sell riskier currencies.

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TuMek3@reddit

That’s a better answer. The UK was known and still is known as one of the worst places to park your capital if you want growth, hence the pound never recovered.

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lumpnsnots@reddit

Pretty sure the worst of the financial crash happened in September 2008 in the UK. (I was in Australia on holiday and things became cheaper literally over night). A look says it wad the collapse of Lehman Bros on Sept 15th. I'd assume post that point the US coped with the impact better. Loads of articles about it

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DameKumquat@reddit

Yes. I was in hospital for a week that month, and spent my time watching the news and happily watching interest rates and thus my tracker mortgage plummet, day by day.

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PlasticFreeAdam@reddit

For someone who sometimes gets paid in USD, I don't mind this scenario.

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CustardCreamBot@reddit

**[OP or Mod marked this as the best answer](/r/AskUK/comments/17vtpqp/does_anyone_have_idea_on_the_sudden_decline_of/k9csa30/), given by u/AJCham** 2007-08 were the years of the global financial crisis, which began with the subprime mortgage crisis in the US. > >It's not so much that GBP had become strong in 2007, but that USD had drastically weakened. The effects of the crisis would hit the UK more severely the following year, including a market crash in January. --- [_^What ^is ^this?_](https://www.reddit.com/r/AskUK/comments/jjrte1/askuk_hits_200k_new_feature_mark_an_answer/)

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AJCham@reddit

2007-08 were the years of the global financial crisis, which began with the subprime mortgage crisis in the US. It's not so much that GBP had become strong in 2007, but that USD had weakened. The effects of the crisis would hit the UK more strongly the following year, including a market crash in January.

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Educational_Sound188@reddit (OP)

!answer

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Visible_String_3775@reddit

I don't think this post is questioning what happened during the 2008 crash, but rather why since recovery most currencies (notably GBP) have ended up significantly weaker against USD

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TuMek3@reddit

Finally someone with a brain 🙂

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MisterBirbies@reddit

The £ has been even higher than in 2.05usd before, hitting 2.60 in the 1970's. You would need a crash in the US economy, as the dollar is the world reserve currency, so it has an advantage. Measure the £ against other currencies for a truer view of its performance.

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Clever_Username_467@reddit

The fact that the $ is the reserve currency is the reason why it's the best comparison to make because that's what we pay for most of our imports in.

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TuMek3@reddit

The pound slumped (and never recovered) against many western economies in 2008.

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Clever_Username_467@reddit

Do people really need 2008 explained to them? It was basically no time ago, but people keep posting questions about it like this as though they were asking their granddad about the war.

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TuMek3@reddit

“Do yOu nOt knOw aBouT thE fInaNciAl cRisiS” doesn’t really fly as an answer to this question. The crisis started in America which doesn’t explain the sterling slump. The reasons are simply people wanted to hold usd as a safe haven and every man and his dog wanted to get rid of their Stirling because no one expected growth from the UK, and boy were they right.

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DoireK@reddit

A lot of people on reddit would have been a small child during that time though in fairness. I remember it because I was 15 at the time but I can see why anyone who is 25 and under might have questions.

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Purple_ash8@reddit

Recession/credit crunch, duh.

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All_within_my_hands@reddit

I don't think it will ever recover to the point where it is double the USD. Why would it?

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Specific-Salad3888@reddit

China is slowly dumping USD, it's holding 3trillion at present. It could dump a whole lot of them at once which would devalue the USD. This would also make Chinese purchases using USD more expensive but China is buying oild from Russia in yen or rubles at present.

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Agitated-Tourist9845@reddit

There are no certainties in the financial market.

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Alarmed_Crazy_6620@reddit

There are likely and unlikely scenarios though. Argentine Peso equating $1 is unlikely unless they find vibranium. GBP getting back to 1:2 with USD is unlikely if we keep the really sluggish growth

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All_within_my_hands@reddit

I categorically did not say they were. What an odd challenge to make.

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joeykins82@reddit

In the wake of the 2008 global financial crisis, the US went for stimulus and we went for austerity.

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WinkyNurdo@reddit

Come on man. Google “world shitshow 2007” and report back.

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capttaain@reddit

Erm somebody tell him

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Al-Calavicci@reddit

Same reason other currencies are weaker against the USD - a strong USD after a global financial crash. Take the Euro, that’d get $1.49 in 2008 and it’s dropped since then to $1.08 today.

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SuboptimalOutcome@reddit

Mindful of rule 2: [The pound collapsed](https://www.wsws.org/en/articles/2008/12/brit-d08.html) against the dollar because of impending recession, falling interest rates, a far bigger exposure to the bad debt from the banking crisis than other countries, and a much less dynamic economy than the US, which used TARP to suck the bad debt out of its system.

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simundo86@reddit

Yeah missed them days bought a Rolex when it was 2 dollars to the pound. In hindsight with I had bought 10

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