Its been a torrid time for the pound this summer against most major currencies with the pound falling to multi year lows against the euro and US dollar.
The on-going Brexit saga is most likely the main driver for sterling’s demise and this week the Bank of England have warned that further falls are on the horizon if the UK crashes out of the EU without a deal. In addition, another report released by the Bank of England this week was spending habits for UK businesses. In the month of June, UK businesses sold the 3rd highest amount of sterling to buy foreign currency since records began in 2010.
Looking ahead, MPs return to the House of Commons on the 2nd September. Reports are suggesting the leader of the opposition will call a vote of no confidence and it will be Tory rebels that will have to vote against Boris if they want to stop a no deal Brexit. If MPs fail to overthrow the PM, then all eyes will turn to the EU. If negotiations fail in the next 8 weeks, forecasters including the Bank of England believe the pound will fall.
This morning UK growth numbers are set to be released. GDP is set to fall to 0% for the quarter due to a slowdown in the economy because of the Brexit uncertainty. If GDP falls into negative territory this could cause problems for an already troubled pound.
If you are buying a foreign currency for a property purchase or for your business requirements, keeping a close eye on the Brexit negotiations seems wise. If you would like to buy your currency in advance you may wish to contact the trading floor for the latest currency update.
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