Response

The Bank of England are expected to cut current interest rates from 0.5% to as low as 0.25% in the coming months after the referendum in order to boost the economy and improve business confidence by increasing borrowing. This is great for businesses looking to borrow money in order to invest in capital, however it reduces the value of people’s savings.
By cutting UK interest rates even further, it suddenly becomes less attractive for foreign businesses to save money in UK banks, causing there to be a decrease in the demand and hence value of the pound. The UK is having to sacrifice its exchange rate, which continues to fall, in order to improve the state of its economy and bring back confidence.