0

On the other side will be the real opposition: the pound. As the likelihood of Britain’s departure from the single market grows—a corollary of its uncompromising stance on immigration—the country’s economic prospects will decline. Sterling will struggle to find a floor, inflation will start to hurt, growth will fall below that of the euro zone and investment will slow.

Find a floor? does it mean it will have difficulties landing on the ground(stabilize) being unstable? Or because of the inflation it will float like a balloon? I don't know what sense it is used.

the source: http://www.theworldin.com/article/12586/wait-fall

1 Answer 1

2

This phrase is being used with regards to the valuation of the pound sterling as a currency. This excerpt talks about the potential negative consequences Britain leaving the EU will have on itself economically, including the effect it will have on the valuation of its currency. Often, when something negative happens to a nation's economy, the valuation of its currency will go down in value, but will usually stabilise and stop going down in value over time.

To say that the pound sterling will struggle to find a floor means that when the value of the currency presumably drops due to Brexit, it won't get to this period where it stabilises (the floor) and will continue to drop over time. The reason this metaphor is used is because the floor (the rate stabilising) is a state that you (as an economy) would like to reach, but are struggling to attain.

I would liken it to the concept of you falling into a dark hole. You want to hit the bottom as quickly as you can, because that means your fall is smaller and it's easier to get out. If you're falling and you can't find the bottom, that means that hitting the bottom is going to hurt you more, and it's going to be harder to get out once you do.

3
  • but it is "struggling" to find a floor not that it is dropping onto the floor.
    – jack bang
    Commented May 4, 2017 at 10:17
  • So the "floor" in this case means "where something starts to stabilise"?
    – jack bang
    Commented May 4, 2017 at 10:55
  • That's right, specifically the currency rate in this instance. This stabilisation is important, as currency rates don't generally go up and down in value very quickly; they trend upward and downward. If the "floor" isn't found, the value of the currency continues to fall which generally a negative thing. The "struggle" refers to the idea that you want to hit the floor (stop the rate falling) but you can't find it even though you really want to find the floor (and stop the rate falling). Commented May 4, 2017 at 10:58

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .