United Kingdom

United Kingdom holds dollar reserves and settles trade in USD. Every time the Fed expands M2, that premium compounds against the GBP, on top of domestic inflation.

CPI: World Bank (FP.CPI.TOTL.ZG). US M2: Federal Reserve FRED (M2SL). Reserve premium = cumulative M2 growth − cumulative US CPI.

In September 2022, the pound briefly touched $1.03 — a level not seen since the Bretton Woods era. That wasn't just a bad week. It was the visible end point of a six-year slide that started the morning after the Brexit vote in June 2016, when sterling fell 10% in hours. For anyone holding dollars and watching UK assets, that moment crystallized something most people had been ignoring: currency risk isn't abstract. It shows up in your net worth.

The UK ran persistently higher inflation than the US through 2022 and 2023. UK CPI peaked above 11% in late 2022 — meaningfully worse than the US peak near 9%. That gap matters for purchasing power comparisons. A dollar-earning expat living in London watched their rent, grocery, and energy bills climb faster than American counterparts faced, while also sitting in a currency that had weakened against the dollar. That's a double squeeze that doesn't show up in any single headline number.

The 2022 LDI crisis — when UK pension funds using liability-driven investment strategies nearly collapsed after the Truss government's mini-budget — rattled gilt markets and forced emergency Bank of England intervention. It reminded investors that even G7 sovereign debt isn't immune to confidence shocks. US investors who had allocated to UK government bonds for stability got an education in how quickly sterling assets can reprice.

The US-UK financial corridor is one of the world's largest. Millions of people move money between accounts in both directions — Americans working in London, Brits with US retirement accounts, cross-border families splitting costs between Manhattan and Manchester. The real question isn't just today's exchange rate. It's what a pound bought in 2016, in 2019, in 2022 versus what it buys now, adjusted for inflation in both countries. That's exactly what the calculator below shows you.