Why Does Inflation Cause The Pound to Drop?
Why Does Inflation Cause the Pound to Drop?
Inflation affects everyone — from households to global investors. But what does it really mean for the pound in your pocket, and why does rising UK inflation often lead to a weaker exchange rate? In this exclusive Lucid vlog, David breaks down the key forces that link inflation and currency movements, showing how expectations, central bank action, and market psychology all play a role.
Whether you’re planning an overseas property purchase, transferring funds, or just watching the news, understanding this link can help you make smarter financial decisions. Watch below for a concise explanation of why inflation puts downward pressure on the pound — and what it means for clients managing wealth across borders.
Watch David’s full analysis in the vlog below
Lucid Insight: Why It Matters for Private Clients
A weaker pound can increase the cost of imported goods and services, but it can also make UK assets — like property — more attractive and affordable for overseas buyers. For investors and families with cross-border exposure, it’s vital to factor in both inflation trends and currency risk when planning large transactions or wealth moves.
At Lucid Financial Markets, we help private clients navigate currency volatility with tailored FX strategies, forward contracts, and integrated tax planning. If you’d like a confidential discussion about managing your exposure to sterling or timing international transfers, our team is here to help.
Contact us to discuss your currency risk or arrange a personal FX strategy session.
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Here's What Our Private and Corporate Clients Said
“Relocating overseas meant moving significant funds, and Lucid handled it flawlessly. Dave's personal approach, clear communication, and excellent rates gave us full confidence throughout. We saved a substantial amount compared with our bank and genuinely felt looked after from start to finish.”
“We used Lucid for a large currency transfer linked to our villa purchase in Spain. David and his team made the process effortless, kept us informed at every stage, and locked in a fantastic rate. The experience was far more reassuring than dealing with the banks — highly recommended.”
''David was very detailed about the service, kind in his communication, engaging as a person, and helpful with as much as he could. I really enjoyed working with him and I feel like I've made a long-term connection.''
''I have used a range of online FX services before (Wise, etc...). I was introduced to Lucid as I needed to do a number of higher value transactions.David has been brilliant: transparent, available, good advise,...Overall great service and value for money. Highly recommended and would use again.''
''I used Lucid / David for a purchase of a property in Spain. Was a very good service and would recommend. It's pretty stressful transferring large sums cross border and David gave a very good personal service.''
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Our take
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