Question: The interest rate in the U.K. is 2%, while the interest rate in the U.S. is 2.5%. The spot rate for the British pound is

The interest rate in the U.K. is 2%, while the interest rate in the U.S. is 2.5%. The spot rate for the British pound is $1.25. According to the international Fisher effect (IFE), what is new level of the British pound?

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