Traveling to Britain just got cheaper
While it's unclear how the loss of a Parliamentary majority for Theresa May's Conservative government will affect Britain going forward, one thing is very clear for Canadian travelers: it's a great time to visit our head of state's homeland (yes, believe it or not, Queen Elizabeth II is still our head of state).
Since results from yesterday's federal election were confirmed, the British pound has fallen sharply. It was down over two per cent against the Canadian dollar, trading at $1.7133 Cdn this morning.
This drop is the latest for a currency that has been vulnerable ever since the shocking outcome of last year's Brexit vote. At one point late in 2016, the pound briefly dropped all the way to $1.18 US after holding steady at $1.50 US a year prior to the referendum.
The United States, which experienced its own stunning election last year, offered Canadians a similar post-election travel bargain. From mid-November until early December, the exchange rate got much better for Canadians, dropping almost four cents on the dollar in total. Then, of course, things levelled out a bit and got back to pre-election levels.
For prospective Britain-bound travelers this summer, the question now is how long that advantageous currency exchange window might last.
"The big picture is that political uncertainty could take weeks or months to be resolved and it is likely to weigh on both financial markets (in particular the pound) and the economy," said Paul Hollingsworth, economist at Capital Economics in London.
May and the Conservatives had been relatively unprepared for this sort of outcome. She called the election in April, with sizable polling advantages for the Conservatives. Now, she will have to look for other parties for support in a minority government, and restore confidence that she will be able to govern effectively.