Exchange Rate FAQs

How has the Eurozone debt crisis affected Britain?

Britain is in a unique position; it stands on the periphery of the Eurozone and is not one of the 17 countries that use the Euro as its currency. Because of this the impact has been less than what it could have been.

Eurozone governments have implemented cost cutting measures that have impacted their citizens. Everyday men and women are feeling the squeeze and as a result they aren’t spending as much. This impacts the UK as it affects the country’s exports. Less demand in Europe means less demand for British goods and less money going to the businesses.

As a result British firms have been forced to lay off their staff to save costs which in turn has led to a high unemployment rate. More people out of work means more people claiming benefits and saving their money, which in turn means less money going into the economy.  British banks have been exposed by the Eurozone crisis causing them to not lend as much cash to small businesses and people. The crisis was one of the key causes of the Recession which the country is trying to get out of.