Domino effect of UK riots on economy and the Pound August 9, 2011 at 11:12 am
Riots spread throughout the UK yesterday from North London to areas in South London, Bristol, Birmingham and Liverpool following the shooting of a notorious gangster in Tottenham. Even from my house in the home counties I left a lingering thought to the front door before falling asleep last night, was it locked? Definitely??
With these riots spreading to areas entirely anonymous to the North London shooting it suggests that there is an undercurrent of unrest in the UK with many pointing to a pent up anger from Osbourne’s austerity measures, so I suppose the question is that this being the third night of trouble – where is it going to stop?
You may be thinking by now, but what has this to do with currency? Well the effect on the UK economy could be huge. If these riots continue then there will be a domino effect that outreaches to almost all areas of the UK economy, think about it:
- Police and Hospital staff are being overworked unable to fulfil day to day duties.
- Business are being shut, along with infrastructure such as roads and public bus routes.
- Insurance payouts will be huge, and increasing day by day.
- London Tourism is likely to be muted, not only for last minute holidays towards the back end of this summer but also for people looking to book holidays for next year.
- Cameron, Osbourne, Johnson have only just returned from holiday. Having come home too late to nip this in the bud they are holding a Comittee Cobra meeting to deal with the trouble. This type of meeting is normally reserved for terrorist issues and not civil unrest highlighting how seriously they view the trouble.
All in all this doesn’t look like it will have a positive effect on the UK economy and could lead to preventing UK gains in the midst of Euro and US uncertainty. It had looked like the Great British Pound could usurp the US Dollar as the considered safe haven between the three and thus gains against most majors, but with riots and political uncertainty now looking rife throughout the entire UK rather than just a small section of London this possibility has been entirely undermined.
Sterling which may have otherwise been dominant against the struggling Euro this week may now be held back from our own uncertainty and issues that have spiralled wildly out of control. On the subject I hope everyone is well and safe in the UK, if you have any currency requirement or any questions on this issues and how they relate to currency and the strength of the Great British Pound then do not hesitate to email the author directly on firstname.lastname@example.org.