Industry analysts believe the British pound is currently heavily undervalued due to heightened political uncertainty about Brexit. The currency should remain weak over the next year as the U.K. negotiates the terms of its exit from the E.U. This would help to maintain the U.K.’s cost advantage as a destination for international travelers in the near-to-medium term and fuel solid growth of inbound travel to the U.K., particularly among infrequent or first-time travelers.
1Savings per Visa cardholder on total trip expenses, 2H2016
2 Inflation adjusted and trade weighted
3 Based on VISIT and VisaNet data, North American visitors are defined by the number of Visa-branded consumer cardholders from U.S. and Canada who made face-to-face cross-border purchase transactions in the U.K. during the reference periods (Jul-Dec 2015 and Jul-Dec 2016).
Visa Business & Economic Insights analysis of Oxford Economics, Haver Analytics, VisaNet, VISIT
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*Shading highlights the chart quadrants, which depict the change in the strength of each currency against the pound relative to the home country’s outbound travel to the U.K.