The prospect of yet another large UK company being owned by a foreign investor is becoming more of a possibility following the news that FOX has made an official approach to buy Sky. The offer which puts the company at a value of £18.5 billion comes from the US network after the value of the Pound against the US Dollar fell by over 12% since the UK EU referendum back in June which in turn makes this investment a lot cheaper for the US firm.
Initially this influx of money into the UK economy as part of the buying process could push up the value of the GBP as the demand for the currency SPIKES. This is something to watch out for once the official offer is confirmed and accepted by all parties. The concern however is whether the British company’s profits headquarters are going to be moved from the UK. With the president elect suggesting he will cut corporation tax to 15% within a few years, would the new owners of Sky move the company abroad along with the £3 billion plus tax that it contributes to UK plc? This, if confirmed in the months ahead could have a significant impact on the UK economy and therefore the Pound making anything from property in the US or Europe a lot more expensive.
With 9 days until Christmas I would like to remind our clients that we will be open and trading over the festive period. You can contact us every working day to arrange your payments.
What is worth noting however is due to the lack of liquidity in the market over this festive period exchange rates can be rather volatile. This is again created by the lack of orders being placed which weakens resistance levels resulting in economic events creating larger swings and therefore opportunities in the currency market. If you are looking to complete a transfer within the next 6 week please notify your broker here who can notify you of any opportunities in your favour over this period.
Yesterday the Bank of England confirmed what many had expected including myself, being that interest rates and central policy was to remain the same. Mark Carney highlighted again the concerns about the future for the UK economy including Inflation, Eurozone concerns and China which all resulted in Sterling’s value falling.
The next large driving factor likely to impact Sterling exchange rates are UK GDP figures which are released on Thursday of next week.
With the building concerns about the UK moving forward I think future GDP figures will be under pressure. Thursday’s event however, I expect to show a slight improvement as the negative tone in forecasters and central bankers seem yet to have reached the important high streets within the UK.
The Pound has improved significantly since the beginning of November, but the prospect of higher consumer prices could begin to impact important economic releases in the near future. Clients with a buying or selling requirement may benefit from getting in touch with their assigned currency broker to help mitigate risk. Call our trading floor on 01494 725 353 or email me here if you have any questions regarding todays report.
First class service as ever from Stephen Eakins. Very quick and superb advice!!
Excellent service from Stephen Eakins as always. Manages to achieve a high standard of professionalism and efficiency combined with a friendly approach.
Sending money to France has been so easy. I was amazed at how simple the process was. Steve Eakins is a pleasure to deal with, no fuss or drama just a great, friendly attitude.