Thursday, August 24, 2017

I don't think so.

After the Brexit vote friends told me not to worry, things would be all right - just wait and see.

The pound has tumbled more than 15 per cent against the euro since the UK voted to leave the EU in June last year.

Sterling on Wednesday fell to a fresh eight-year low – an official rate of just over €1.08 against the EU’s single currency. Worse still, travellers obtaining last-minute holiday cash from Southampton Airport’s Moneycorp branch on Thursday were getting just 87 cents for every pound.

Economists at UniCredit wrote in a note to clients on Thursday that the “upward trend” in the euro’s value against the pound “is showing no signs of slowing down”.

Strategists at Morgan Stanley add that the pound’s weakness “is no longer inspiring foreign buyers to come into the market”. They said that they are more optimistic on many other currencies, including the otherwise weak US dollar, and that they think buying the euro against the pound is the most sensible trade at the moment, indicating that they expect the single currency to become even stronger against sterling in the short term.

Last week strategists at the US bank said that the pound would be worth less than the euro on official exchanges by early next year.

When the Euro was last on par with the pound, we thought those were black times. As the pound gained strength, we thought they were behind us. Now it looks like the situation could be even worse.  And it isn't just people like us that are suffering. All of the imports to Britain are going to be more expensive so our friends and family will also be worse off.

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