The Pound fell against most of its major counterparts yesterday, following claims that the UK has no Brexit plan, following a leaked memo which suggested that the UK would need an additional 30,000 Civil Servants in order to handle the UK’s divorce proceedings from the EU. After the ‘report’ was leaked, Sterling dramatically fell nearly 2 cents, highlighting the current market volatility. To highlight the costs to any clients, a trade at the high yesterday before this information was leaked would have gained you an extra €3260 on a £200,000 transfer.
The memo or document was titled ‘Brexit update’ and highlights that there will be no guidance or vision as to what the exit will actually look like. I expect this news story to develop in conjunction with Theresa May’s appeal to the High Court, which is expected to start on the 5th December 2016.
Today highlights how drastically the pound can react to any adverse political news regarding the Brexit, and I feel that for any clients looking at buying Euros with Pounds, it may be worth looking at getting your transfer arranged sooner rather than later.
On Monday it was revealed that the UK construction industry fell to its worst levels in 4 years according the Office for National Statistics’ report, which measures the first three months since the referendum result.
Yesterday, to add further worries to the UK economy, inflation within the UK dropped for the month of October, defying expectations that a weaker Pound would cause inflation to rise. The causes for this figure not coming in as expected was put down to the price of clothing and university tuition fees both rising at a slower rate than that of 2015.
Although the fall in the value of the Pound is likely to boost inflation upwards towards 2017, it is not something that was ‘welcome’ according to Mark Carney in his talk to the treasury select yesterday. Amidst all this information, clients should be asking themselves; what does this mean for my currency transfer?
I personally believe that the fears regarding the UK economy since we have left the EU have been brought back to life, and that this inflation report is a wake up call as to how vulnerable the Pound is.
It will be interesting to see the results of Thursday’s Retail Sales Figures report, which is expected to see an increase from the previous month. If this figure deviates from the expected, then this may be sterling negative.
Further movements for the Pound could emerge if the UK economy continues to show signs of vulnerability. That being said, further positive news for Brexit this morning has seen the Pound surge. If you have an upcoming currency transfer it may be prudent to discuss your requirements with one of our knowledgeable brokers, call our trading floor or email me here for more information.
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Very efficient service. I’ve never used a service like this before & was purchasing a house in France. It was all explained very well & I was kept informed all along the process. Putting a deposit down to pre-book the rate also saved us a fortune.