This new series of weekly currency updates is of most interest to Brits living in Spain with a UK income or pension and those buying or selling second homes. The value of the pound makes a big difference if you are transferring a lot of money but even with a pension of say £1,500 per month, a one percent move equates to 16 euros, equivalent to 11 litres of petrol.
That same pension is now worth 3,300 euros per year less than it was before the Brexit vote; that’s a lot of petrol…
At the moment there is general agreement that the Bank of England will probably raise interest rates next month by 0.25% (back to 0.5%). This matters in the UK as it adds about £30 a month to the average mortgage but it also helps the pound because it’s more attractive for investors to hold their money in sterling if the interest rate is higher.
In the UK there is a mixed picture – an economic slowdown at the same time that the deficit (government borrowing) is reduced and employment is at a record high meaning tax revenues are up. In Europe there is the unfolding situation in Catalonia which hasn’t affected the euro yet and of course the soap opera of Brexit talks.
Scores on the doors:
This past week the Dollar has risen against the euro and fallen against the pound; the pound has slipped against both although at the time of writing on Friday 20th, the pound was making a recovery (euro 1.116, USD 1.317)
Written by TheCurrencyExchange.co.uk