Sterling's decline is linked to the UK's decision to leave the eurozone, says Architas senior investment manager Nathan Sweeney, and the investment world has perceived this to be bad for UK growth going forward.
Speaking in the above video, which continues Professional Adviser's Architas Advent Calendar counting down to Christmas, Sweeney discusses the expectation the UK will suffer worse trade agreements with its global partners following the referendum result. The prognosis is that companies operating in the UK will earn less profit going forward and, as a result, this will impact the level of growth in the UK economy.
Nevertheless, he adds: "Sterling's fall is expected to increase the profitability of companies in the UK that export because those products are now cheaper for overseas buyers. However we have yet to see that meaningfully coming through in the manufacturing data thus far - and unfortunately for the UK we don't actually export a lot.
Sweeney concludes: "The one expectation is that inflation increases in the UK, given the fact it costs UK companies more to import."
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