Pessimistic comments from the Banks of England (BOE) saw the GBP plummeting last week, and further Brexit talks suggest turbulence is ahead. With no clear ending in sight it is uncertain what lies ahead for England as the government continue to battle it out to reach an adequate conclusion for the future of the county. However, the Bank of England have suggested interest rate cuts are likely regardless of the decision reached by parliamentary leaders. With hundreds of Britains preparing for their October half-term holiday, all eyes are on the exchange rate to see if sterling regains any of its former strength.
According to Bloomberg the pound is currently trading at 1.124 against the euro at the time of writing.
With the economy facing its own troubles, the fate of the pound relies largely on British policymakers. Prime Minister Boris Johnson fuelled an additional wobble as he exacerbated fears of an early general election, while maintaining that the UK will push forward with leaving the EU on October 31.
In the wake of an impending early election, opposition parties are rallying for the removal of a no-deal Brexit all together.
Even if the Prime Minister achieves his goal of an end of October Brexit, there remains some hope for the pound.
If Johnson successfully strikes suitable deals for the country, side-stepping a risky no-deal, sterling is anticipated to regain its ranking.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.
He said: “Sterling struggled against the euro on Friday after dovish comments from BoE policymakers Saunders raises the chances of interest rate cuts, even in the event of an orderly Brexit.
“The pound now has to contend with the unenviable mix of ongoing Brexit uncertainties, a slowing economy and the prospects of looser monetary policy.
“Turning to the week ahead, shifts in Brexit sentiment will remain the key driver of the pound, with attention likely centring on the Conservative Party Conference. Markets will also focus on today’s final Q2 GDP figures, along with this week’s PMI surveys.”
For British holidaymakers, the affect of Brexit is already being felt, despite its pending status.
The Post Office is currently offering an exchange rate of €1.1011 for over £400 and €1.1056 for over £1,000. However, even with a fairly average rate, Briton’s are fearful of the future.
New research has revealed that over half of UK residents surveyed report concerns about the impact leaving the EU will have on the cost of currency and ultimately their holiday.
The report was carried about by peer-to-peer travel money provider We Swap, who discovered that 54 per cent of British holidaymakers say their biggest concern is how the UK’s departure will affect the cost of foreign currency.
A further 15.6 million think their annual holiday will take the greatest beating from the move.
Speaking with Express.co.uk, Rob Stross, CMO of WeSwap offered some advice to those with impending travels.
He said: “It is near impossible to predict how the pound’s value will change in the run up to the 31st October, however, it does pay to be aware of any upcoming political events which could affect the pound’s value so that holidaymakers can prepare as much as possible for any outcome.”
“For those looking to go away during the October half term, it would be best to exchange money as early as possible.”
Stross also points out the importance of converting left over money back to pounds. According to WeSwap’s research only nine per cent of Britons change back their leftover currency, totalling a whopping £2.5billion left unused.
He added: “With the exchange rate fluctuating so much recently due to Brexit, travellers returning may be able to get more from their money they have done recently, so it is worthwhile looking at your options when you return to make sure you’re not sat on a small fortune.”
