Theresa May in for a Pound-ing

Theresa May delivering her 'no deal is better than a bad deal' speech (Image: Time.com)

I recently visited Iceland and while I was in awe of the wonders this country had to offer, more significantly (only for the purpose of what I'm writing here), this was my first trip abroad since the UK's EU referendum. So during my sightseeing and fine dining, I also had my eyes on more serious matters. Call me over-analytical and someone who is unable to relax, but my visit to its capital Reykjavik haunted me back to what UK's Prime Minister Theresa May said earlier that week about her government's EU exit strategy plan.

I'll start from the beginning. I arrived in Iceland using a currency I've never used before (Icelandic Kroner, ISK), so admittedly, I underestimated how expensive everything was. I was at a reasonably priced diner, for example, where I had burger, fries and a drink for ISK 2,145. If I had a steak from the same place, without the beverage, I'd be required to pay ISK 3,000. Not bad, you may think. If you calculated my burger order in British Sterling, the meal would have been £16.50. Again, that's reasonable, isn't it?

You may think that, but I was silly enough to put my 'Remoaner' cap on during my trip and had to see how much my order would have cost if I was in Iceland this time seven or so months ago (i.e., the day of that EU referendum on 23rd June). The total was £11.87. Without the diner changing their prices (I had checked) during this time frame, my dinner cost nearly £5 dear - and this hike trend continued across the Icelandic capital and beyond.

Pound has plummeted in value since 23rd June vote

The key factor towards this was thanks to the weakening Pound. Our Sterling on 24th June - the night after the EU vote - saw its bleakest day in recent history. Instantly the Pound against the US Dollar collapsed from $1.49 to £1 to $1.37 and today, as I write this, it's $1.25 to our Pound. The Pound against the Euro doesn't show pleasant reading either. Meanwhile in Iceland, on the day before the EU referendum, it was ISK 180.56 to £1. When I exchanged last week, it was 130.34 - which seems like a deeper percentage drop compared to the US Dollar. The Pound's road to recovery is likely to take a long time - largely due to Donald Trump's unexpected Presidential election victory last November in addition to the UK's imminent EU exit.

Now, media reports on the British economy have been a mix bag of wild speculations and apparent realities. And while Article 50 hasn't yet been triggered as I write this, rumours of how UK businesses would cope when the country leaves the EU and Single Market will continue to dominate headlines. Of course, the future of businesses - big or small - is vital, and certainty is key. Yet, trade and tourism is just as important to our economy - and hence jobs and individual prosperity.

Trade was one of the key reasons why unions like the EU are formed. It's a great idea for countries to import others' valued assets and for us to export our own - and at a good price. This is celebrated by most of the major economies, and it's welcoming that Theresa May acknowledges this too. However, to do this effectively, a strong currency is needed so that nobody loses out. From what I can interpret, our Pound is nowhere near ready for trading outside of the Single Market.

The Pound is so dire in comparison to pre-23rd June, anybody who is an avid follower of currency conversion rates wished they never were. Britain will lose out on potentially billions on any deal - however 'good' they appear in the eyes of May's government.

75p and 85p juices sold for ISK 200

I'll give you an example of how much our exporters could lose. During my visit to Iceland, I stumbled across British produced Orange Juice at a local convenience store. I knew it was British because it had printed on the cartons '75p' and '85p', and that it had 'Euro Shopper' labelled on it - a common sight for those Brits who shop in Premier Stores. Anyway, these '75p' and '85p' cartons were sold in this shop for ISK 200 (was £1.10, now £1.53). A British business missing out on 25-35p per item is bad enough, but 75p is near calamity considering these items are usually delivered in bulks, and at a high charge. This shop also had ISK 400 £1.75 McVities Digestives - you can imagine how much that business is profiting today. They must be laughing.

Imports to Britain will cost us, the taxpayer, dear too. Danish retail store giants, Tiger, now has 44 UK stores. The items sold in these branches are notoriously cheap, though cost a small fraction less in Denmark. Imports like these are precious to the British economy but as the Danish Kroner (DKK) outshines the Pound (on 23rd June, it was 10p to 1 DKK, now it's 12p), this may be great for the Danes, though this fiasco would be highly off-putting for British consumers, who will notice bumped up prices in these stores, just so the branches cover hiked import charges?

We can't dismiss the Pound as a commodity interested by the fuddy-duddy. Maintaining a solid currency means it's good for British tourists who want to travel abroad as well as key trading deals. Theresa May must be short-sighted if she genuinely believes New Zealand, United States and so on are more than happy to do trading deals with Britain on the pretence that the UK is a strong economic nation. Britain is a strong nation economically, but right now, the country's goods are dirt cheap.

I wouldn't have complained if, say, the US Dollar or Euro are also struggling - or if all major currencies mentioned here are doing well - so that UK leaving the EU wouldn't make a big difference. But since it's the Pound that has suffered a diagonal downfall since the infamous referendum result, countries are bound to either line up, or run away by the notion that British exports are cheap or not seen as valuable. Theresa May has a point that 'no deal is better than a bad deal' because she's perfectly aware that there'll be plenty of bad deal offers coming her way - and recognising that late could damage the UK economy for good.