Of course the financial problems are not restricted to the UK, but as the recent news that this country is contracting shows, it’s definitely worse off than many similar places.
That means that it’s not impossible that the pound will fall even further.
So it’s worth asking what the effects will be if the pound collapses, e.g., to €1 = $1.50 = £2 (it’s £0.92 at the moment).
Obviously, holidays and many importing goods will become unaffordable to most Britons, and the UK might become a very popular tourist destination.
However, the effects will surely be very different depending on who you are.
For instance, if you’re exporting goods or services, you’re likely to be much better off, and that will most likely have an effect on all people working in such industries.
Also, some jobs are very international, because people can very easily take their skills and find an equivalent job in other countries. The typical example is doctors, but I presume the same is true for investment bankers, engineers and others.
On the other hand, some jobs just don’t travel very well, so lawyers, civil servants, teachers and many low-paid workers will probably find it much harder to argue that they need a huge salary increase to counterbalance the effects of the low pound.
The same is true for those not in work, such as the unemployed and the pensioners.
A low pound would also make it rather unattractive to come here to work. Imagine a job paying £10 an hour here, but €8 in Slovakia. It would have seemed really attractive to a Slovakian a couple a years ago, marginally better at the moment, but very unattractive if the pound collapsed.
On the other hand, it would possibly lead to mass emigration from Britain because so many jobs would be better paid abroad.