With Bloomberg and principal investment bankers speculating that UK inflation will soar above 15 percent this upcoming winter, there seems to be no chance British holidays to Thailand are going to get cheaper. A year ago, the pound bought 46 Thai baht but the selling rate has now shrunk to little more than 42 at the foreign exchange depots.
Foreign exchange markets hate bad news and there’s currently too much around concerning the UK. Major strike threats to paralyze public transport and major container imports are just the tip of the iceberg alongside slow economic growth and a looming winter gas shortage-crisis. Confusion about the consequences of the political battle to become the latest prime minister haven’t helped. Many pundits say a full-blown recession is likely, or has already started.
Meanwhile, the Thai baht has benefitted by some recent developments. The country’s food exports have risen dramatically as a consequence of Mr Putin’s invasion of a neighboring country, according to the Thai Food Processors Association. Supply chain disruptions are less noticeable in Asia than in Europe, whilst the latest banking figures show that Thailand, the region’s second-biggest economy and net oil importer, will grow by 3.3 percent in 2022. That’s double last year’s figure. Growth in international passenger arrivals is another positive feature, although the rise in airfares, shortage of flights and the absence of Chinese group tours are limiting financial factors.
In times of upheaval, investors prefer the safe haven provided by the US dollar. Also, the American economy continues to grow modestly, even as China’s falters, and the Federal Reserve believes it has the tools to tackle domestic inflation which some experts say is now stabilizing. The oil-independent American economy is affected less than many countries by the Russo-Ukraine war. As regards the Thai currency, the baht has fallen around 10 percent in value against the dollar so far in 2022. The British pound has shrunk by a similar amount in relation to the US currency to be now worth around 1.18. For the foreseeable future, the UK currency is stuck in the international mud.
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