Pound New Low on Brexit Date

Pound New Low on Brexit Date.

The British pound £ fell to a new 30 year low against the $ US dollar today following announcements by Prime Minister Theresa May over the weekend that the UK would trigger Article 50 to start negotiations to leave the European Union by the end of March 2017.  This means that the UK will leave the EU by the 1^st April 2019.

As a direct affect, the £ fell to $1.29, its lowest point since 1985.

What does this mean for business, property holidays?

• It means that if you hold foreign currency today, you could exchange back to sterling at preferential rates.

• If you are going overseas, it you will get less for your £.

• If you are a foreign investor, UK property and investments, as well as holidays in the UK, are significantly cheaper.  There will be potentialy higher foreign investment.

• If you are a British business exporting goods and services overseas, these are much cheaper.

• If you are a British business importing goods, services and materials, things just got more expensive.

Why End of March for Brexit?

It makes total sense to go for a new world outside the EU from 1st April 2019.

• The 1st is when new business corporation tax rates usually start.

• The 1st is the usual date for any VAT rate changes.

• The start of the financial year for personal income taxes and self assessment is 6th April, just a few days later.

What of the future for the £?

Unknown but we do expect the £ to weaken a little more but recover as we move towards knowing what the UK’s negotiating position will be over the coming year.

Shop around for currency

There is a huge difference on currency exchange rates out there.  For example, we recently exchanged some dollars back into sterling and one well known source for ‘holiday currency’ offered a 10 cents lower rate than did a high street bank, and they are supposed to be ‘commission free’.  You should shop around.

If you are a business, it may be worthwhile negotiating with specialist foreign currency exchange platforms to fix your costs when importing or exporting, to at least have a known rate that you can price your business goods and services.