ANALYSTS: The pound could drop almost 20% further in a ‘no deal’ Brexit scenario

People queue outside a branch of Thomas Exchange Global foreign exchange in the City of London July 1, 2014.Reuters/Luke MacGregor

LONDON – The most noticeable economic impact of Brexit on the average Brit in the past year has been the monumental drop in the value of the pound since the vote.

Holidays have become more expensive and imported goods have gone up in price.

Sterling witnessedthe largest single intraday drop against the dollar in its history the morning after Britain voted to leave the EU in June last year.

The pound continued to slide for several months afterwards, with wild swings in value, a flash crash, andmoves driven by political developments.

Then the market calmed down, Brexit stopped taking a toll on sterling, and everything seemed to getting back to normal. But as Brexit talks start to falter — reaching “deadlock” last week — the pound is in focus once again.

There now seems to be a genuinely possibility that Britain will end up with the hardest possible Brexit, in which it drops out of the EU without any sort of deal, reverting to WTO trade terms.

If that scenario were to come to pass, it seems almost inevitable that the pound would drop even further, breaking new records for its lowest modern levels against the dollar, and possibly reaching parity against the euro for the first time in history.

Business Insider looked at the forecasts for the pound of five analysts at major financial institutions in the event of a soft Brexit. This week, we’ve taken the same analysts and provided their predictions for a hard Brexit in which the UK drops out of the EU without a trade deal.

Most of the five predict that sterling will drop to a range between $1.10 and $1.20. The lowest end of that spectrum would represent a 17% drop from current levels — which already mark a more than 10% from sterling’s pre-referendum high.

Check out the forecasts below.