bobd22

Yes the pound may go down further over the short term. I think once discussions re how we actually leave the eu start and some clarity is seen as to how that will evolve then we will see how pound will fare longer term. No way can I see it at current and lower levels for a decade. The Euro is known to have issues including some as in Greece simmering in the background. As always we must just wait and see obviously Brexit is complicating the norms as no one been there before. Unfortunately you just have to ride with. Property purchase at the moment personally I would hold off until you can see the wood from the trees.

Bo S

Two years ago you could have got $1.60 and $1.70 five years ago. This was due in part that the UK was going to be the first European country to start raising interest rates. Opposite happened and Brexit to boot.

If UK economy remains strong and Brexit works out well then the UK could still be the first to raise rates although that is a quite a while off now.

You need to ask for a discount on the house you are buying to reflect your new financial position.

snikpoh

... fine if buying from a Brit but I doubt the Spanish will care two hoots!

teuchterpete

Not found anybody who thinks the pound will recover, and just about every financial institution thinks it will drop to about parity sometime next year. As with everything, else it is your money, so your risk!
Pete

Pulaski

As I have posted many times, if the banks could reliably predict what the exchange rate will be two weeks from now, they would make a killing. However in fact the banks cannot consistently do better than someone guessing would do, and many banks simply stopped try to make money trading currencies because they lost as often as they gained.

In practice the banks don't have the slightest idea where exchange rates will be two weeks from now, and any opinion about exchange rates next year is no more likely to be right than a weather forecast for next year.

The only exception I would concede is that people may modify their behaviour based on bank predictions, which, if the banks predict a continued slide will encourage people to sell sterling now, but conversely discourage would be buyers of sterling who expect a better rate in future. By encouraging sellers and discouraging sellers the equilibrium market price will decline more sharply, but bottom out sooner and also recover more quickly, which is what happened in 1985 when the pound approached parity with the US dollar.

amideislas

Well, Pulaski, they've been predicting it for a while. And so far, they've been right.

rspltd

What they have been predicting is that there would be a run on the pound firstly by investors (they don't like uncertainty) and secondly by speculators who see an opportunity to make money. Now the financial figures are consistently showing improvements it has started to creep up again. Very soon the EU is going to have to come clean about the state of Greece and the Italian banks and then the speculators will look elsewhere. Who knows what they will think about Spain having a minority Government with Rajoy still in charge?? and what will it do to the Dollar if Trump is elected???

bobd22

On Social media I now see posts saying that the falling pound is nothing to do with Brexit. They will say the same no doubt when petrol shoots back up to near £1.50 a litre. Politicians are now saying only how good a weak pound is for exports and the economy strange they were not complaining pre referendum on its strength. In fact I seem to remember Osborne and Cameron saying that a strong pound was proof of economic confidence in the UK? So surely a weak pound shows the opposite? Of course they will not admit that just as brexiters will not admit their part in what is going to be difficult times.

Loafing Along

The Unilever / Tesco spat over pricing sums it up. The UK economy is not independent, many companies rely on foreign sourcing of components and produce and now, with a weak sterling everything will start to get more expensive. Round the corner is a good dose of inflation, that under normal circumstances would lead to an increase in interest rates which should strengthen the currency but these are not normal circumstances. Next will be a downgrade in UK credit rating...
Hammond is right "No one voted to be poorer" but they are going to be

olivefarmer

If I was making the judgement on what the pound and the Euro will look like in five or ten years time I would be looking at what the future holds.

Pound able to float against currencies. UK economy is still the fastest growing out of G7 economies. Regardless of your views on whether Brexit is good or not Britain isn't a dead duck.

Eurozone. Well they have Germany as a plus. However the eurozone is stagnating. No plan to fix the huge unemployment problem affecting many countries. Although the number of poor in some eastern Block Eu countries has fallen, it is rising in Spain, Italy and Greece. No solution for Greece at all. What money they get in bailouits doesn't go to the people. Italian banks are perilously close to collapse. Spain will get fined by the EU at the end of 2018 if it hasn't got its debt down to 60% of GDP. Currently it is over 100%. How are they going to do that? Might be a big trading block but it has a lot of problems in my view and isn't /cannot be fleet in responding.

So I would be confident the pound will recover against the Euro within the next ten years starting when the Brexit dander has settled. At the moment it is acting as the "opposition" to the Tory government.

missile

The crooks in suits will spin the facts to suit whatever fairy tale they want the voters to swallow

VFR

Yup !

Loafing Along

Pulaski

amideislas

No it isn't. The pound just keeps falling.

And trump isn't going to win, so you can be relieved about that.