Not Looking Good for the Pound

[Romany]

The pound is dropping like a stone and according to HSBC it is going to get a lot worse before the year is out
https://uk.finance.yahoo.com/news/hsbc- ... 00021.html

[Eagles Fan Forever]

Then those people that are doing so, should stop dragging the country down and get behind it and show some confidence in it's ability to succeed out of the confines of the draconian EU

[Maramike]

This is just one forecast. If you look across the board there are amazing differences between the various institutions.
These are the forecasts for the final quarter that I have.


Independent Bank FX Forecasts for EUR/GBP

Barclays 0.66
HSBC Holdings 0.92
Mouvement Desjardins 0.80
BNP Paribas 0.81
Credit Suisse Group 0.86
Wells Fargo 0.85
Jyske Bank 0.84
Scotiabank 0.84
Banco Bilbao Vizcaya Argentaria 0.85
Nomura Bank International 0.82
UniCredit 0.91
Rand Merchant Bank 0.85
Saxo Bank 0.77
Monex Europe Ltd 0.79
ABN Amro 0.88
AFEX 0.86
Ebury 0.73
MPS Capital Services 0.80
Silicon Valley Bank 0.91
Bank Julius Baer 1.00
ING Financial Markets 0.85
JPMorgan Chase 0.89
Banco Santander 0.95
Canadian Imperial Bank of Commerce 0.83
Investec 0.84
NAB/BNZ 0.88
Natixis 0.86

This represents a spread of 1.00 to 1.52!!

[Jim]

I do not think getting behind the pound sterling will help, brexit is the problem, as I have said those who voted for this may just come to regret the out vote, and yes I know this is dragging it all up again but the truth is what it is.

[propforward]

It's the Bank of England again, retail sales for July were up 1.1 percent against the forecast of 0.7 percent but a member of the Bnk of England monetary policy committee came out and said that it was likely that interest rates could drop even further, so instead of sterling improving it got hit.

[Happy in Cyprus]

The Bank of England is independent of government and has been for many years. It's the Bank of England's duty to look after the country's best economic interests. If they deem that a further cut in interest rates is necessary, who are you to argue differently? And having made the decision to reduce rates, is the BoE supposed to keep it top secret...or do they have a duty to promulgate such views and news.

Trouble is, now that all the things which were forecast to happen post-Brexit are actually materialising, Brexiteers look for scapecoats to blame. In other words, it's everyone else's fault but theirs that the pound is plummeting and other negatives which were forecast to happen post-Brexit, are now coming to fruition.

[johnoddy]

I do not have any regrets about leaving, we all knew the £ would take a hit but it will soon bounce back once we break all ties with the federalist EU and start our own trade deals.... and with the downward spiral the EU allowed itself to get into I predict the £ will get you 2 euros within 6 months of that final break

[Happy in Cyprus]

...but it will soon bounce back once we break all ties with the federalist EU and start our own trade deals.... and with the downward spiral the EU allowed itself to get into I predict the £ will get you 2 euros within 6 months of that final break

You know that for sure, do you? Or is that what you're banking on?

[johnoddy]

Watch and wait, it's my prediction......what's yours?

[Jim]

Will we all get better off leaving, dream on mate. I cannot afford to wait twenty years.

Do let me know I have a couple of K in £'s I will be happy for you convert to 2 euros in six months as you say.

[KG]

The Bank of England is independent of government and has been for many years. It's the Bank of England's duty to look after the country's best economic interests.

Mark Carney didn't show much evidence of that as he was talking the country down during the Brexit campaign; comments from which he has been backpedalling furiously since the vote. The IMF too has apologised for getting it wrong again.

The Pound is currently at 1.17 against the Euro, a rate which is higher than it has been for long periods since 2008, and much higher than in (say) 2011, when it struggled not to drop to parity with the Euro, and that was long before the Brexit vote.

There was always going to be uncertainty as the country decided on how to achieve its new direction, which is grist to the mill for currency speculators. In reality the effect of the Brexit vote has been relatively modest. The uncertainty will remain until the government ends the current limbo and actually leaves the EU.

Analysis from Visa and Markit shows a sharp rise in UK expenditure of 1.6% year-on-year in July, up from 0.9 percent in June. There’s been an 8.9% rise in spending at restaurants, a 5.2% rise in recreational spending and a 3.9% rise in spending on clothing. In the first week after the referendum consumer spending rose 2.14%. Rather than reining in spending, Brexit Britain is booming… However the 'ever neutral' Bank of England has reduced the interest rates and is printing more money (which effectively devalues the pound) to 'encourage spending', though in reality it is just more free money for the banks. Independent? Don't make me laugh.

Countries are queuing to make trade details with an EU free UK, but in order to sign up to those deals Britain has to be free from the EU, which is why there is a growing voice to ditch the EU now.

Remainers seem pre-occupied with a necessity to remain in the single market. There is no need to do that at all - though if it can be achieved without being a member, which seems unlikely, then fine, but foot dragging in the hope of such an eventuality is pointless. At the weekend John Redwood argued that the UK could quit the EU with a series of Parliamentary votes at Westminster to scrap the European Communities Act rather than going through the lengthy Article 50 process. That being the case, they should get on with it.

[Jim]

It is all guessing game Graham as I am sure you know, how will the pound go is anyone's guess and that is what this is..

[Happy in Cyprus]

Graham, it matters not what the pound was worth 6 months ago or one year ago. What's relevant is how how much the value has deteriorated as a direct consequence of Britain's decision to leave the EU. Other factors could still cause it to go lower, beneath the new benchmark which has been set.

For most small to medium-sized companies I think it is more than a little optimistic to envisage that exporting to far-flung countries like Australia, Canada and the USA can ever hope to replace trade with the UK's very near neighbours in Europe.

[keving]

Britain’s vote to leave the EU has had little immediate impact on people’s spending habits, according to new figures that suggest more money was splashed out on clothes, meals out and day trips in July.

Consumer spending picked up in July as the warm weather provided an incentive to eat out and buy new summer clothes, figures from Visa showed, contrasting with signs of a drop in business activity following the June vote to leave the EU.

But releasing its first post-referendum spending report, the payments company said growth was still slower than at the start of the year.

The monthly index, compiled with the financial data company Markit, showed consumer spending rose 1.6% year-on-year in July, up from a growth rate of 0.9% in June.

Kevin Jenkins, UK & Ireland managing director at Visa, said: “July’s data suggests that UK consumer spending is holding up despite the ongoing uncertainty following the referendum, albeit at lower levels of growth than we’ve seen in the last couple of years.

“Looking at the last three months, the index indicates that consumers remain cautious with their spending. Overall growth is hovering nearly one percentage point below the average seen over the past two years.”

The hotels, restaurants and bars sector saw the steepest year-on-year rise in spending, at 8.9%, continuing a trend of people spending on experiences over things. The amount spent on recreation and culture, which includes trips to the cinema and theme parks, rose by 5.2%. Spending on clothing and footwear rebounded from a fall in June to be up 3.9% on the year in July.

Annabel Fiddes, economist at Markit, said the outlook for spending was clouded by fragile consumer confidence.

“Although the July data point to signs of improvement, anxiety around Brexit and a slowing private sector economy may pose further downside risks to expenditure growth for the rest of 2016,” she said.

Against that backdrop the Bank of England cut interest rates to a new record low of 0.25% last week as part of a package of measures to ward off a post-referendum recession. It predicted economic growth would slow sharply in the second half of this year and hinted there would be more cuts to official borrowing costs.

Other indicators on the economy since the Brexit vote show business confidence has deteriorated as companies fret over the UK’s future trading relationships and ability to attract overseas investment.

A monthly health check of firms in England and Wales, released on Monday, suggests most regions recorded declines in activity in July and a three-year run of employment growth came to a halt. Order books deteriorated and a weaker pound, which makes UK imports more expensive, raised cost pressures.

The Lloyds Bank regional PMI report, also compiled with Markit, signalled the sharpest drop in activity for businesses in England since April 2009, when the global financial crisis was buffeting the UK economy.

London suffered the biggest drop in activity while the east of England and the east Midlands defied the broader downturn. In Wales, business activity remained little changed from the month before, according to the poll of purchasing managers at more than 1,200 private manufacturing and services companies.

Tim Hinton at Lloyds Banking Group said: “As expected, business activity has slowed on the back of the EU referendum result. While the impact has been felt across the UK, companies in the south-east and London were hit particularly hard.

“UK firms will likely face challenges in the short-term but the Bank of England’s decision to cut interest rates could help crystallise important investment decisions and in turn support the economy.”

A separate report from accountants BDO suggested that business confidence had dropped to a three-year low based on a collation of existing surveys taken in recent weeks. However, the drop was “not yet as dramatic as may have been predicted”, the authors said.

The next indicator on spending since the referendum vote comes on Tuesday from the British Retail Consortium. There is fresh news on the housing market on Thursday, with a report from the Royal Institution of Chartered Surveyors (RICS).

Economists at Daiwa Capital Markets in London said the reports are “expected to confirm that activity in the retail sector and housing market declined in the weeks following the vote to leave the EU”.

Chris Hare, an economist at Investec, said the improved weather may have supported retail sales in July, as measured by the BRC figures. However, he highlights pressure on spending in future months.

“We see consumer demand softening over time as households face a double hit from slowing employment growth and a real income squeeze from higher imported inflation, due to falls in sterling,” he said.

https://www.theguardian.com/business/20 ... vote-shock

[Romany]

Pound still dropping like a stone. Does not really matter what everyone thinks or speculates. The market will be the final arbiter.

[reesy]

Many of our friends voted Brexit and tried to convince us it would be good for the Euro...As I told them then, they obviously don,t understand the question. Even now their answer is " It,s early days yet " Dopes!

[Barb]

People have still not woken up to what they have done. Boris knew immediately, as you can see from his face when the result was announced.

[lion]

What's really happening is the result of all the negativity created by the doom mongers.

Nothing has actually changed except for a vote has taken place.

[Jim]

Maybe lion but we live and die by these people who run money matters in the UK, they did not like the UK leaving the EU and the value of the pound is showing this, no hiding from this fact..

I go with you Dave on this, but you have to accept many folks never considered the consequences of the vote, It has been done nothing we can do now.

[Jim B]

What's really happening is the result of all the negativity created by the doom mongers.

Nothing has actually changed except for a vote has taken place.

Give the Speculators the opportunity and they will take us to the cleaners; the Brexit vote was that opportunity.

Jim

[lincoln]

What's really happening is the result of all the negativity created by the doom mongers.

Nothing has actually changed except for a vote has taken place.

Spot on. Just wish the wingers would go away quietly.

[Jim B]

Spot on. Just wish the wingers would go away quietly.

Why is a statement of fact whinging in your eyes; the Euro was 1.44 to the pound earlier this year and as a direct result of the Brexit is now down to just above 1.17. Now it may annoy you seeing and hearing people concerned about the spending power of their pensions falling but they have every right to comment just like you have.

[Sinbad]

Sorry JimB you are wrong the pound has not been 1.44 this year . It did make 1.42 last year for a short while . It was just over 1.30 before the referendum . Some forecasters are saying it will get back to 1.30 by the end of the year others say down to parity .

[Jim B]

Sorry Sinbad but that's what I got when I transferred 15000 Euro's earlier this year with Transferwise but let's not split hairs heh?? you know what I mean.

It's no good saying , well it will be ok in two years time when you need the money today is it?

[lewisestwo]

Many of our friends voted Brexit and tried to convince us it would be good for the Euro...As I told them then, they obviously don,t understand the question. Even now their answer is " It,s early days yet " Dopes!

Getting a little sick and tired of those who voted remain seem to think that all the 17 MILLION who voted leave are dopes.
I don't know about the 17 million,but I voted leave because I didn't vote in 1971 for the festering pile of un elected socialistic do as I say not as I do that is the EU.
And no matter what happens I will NEVER regret voting leave.
Harping on about Johnson and Co lying about the Exit..............of course every word spouted by the remain camp was gilt covered truth wasn't it !!!!!

[Party-Jane.cy]

Goodpost - I voted to leave too and don't regret it. The only thing I regret is voting to join in 1975

Alan do you live on Cyprus and have UK pension, you would regret that vote if you did...fact Jim

[Jim B]

I think it's because the EU leans to the left that it sticks in your craw Lewistwo; if it was a right wing fascist "do as I say" junta would that have suited you better? The only ones not elected are the Commission and they don't make policy though you don't really want to know the truth do you; try reading up on how it actually works instead of getting your information from the tabloids?
But as usual we digress when there is no real answer to the point raised in that the Brexit vote has caused a large percentage drop in the pound against the Euro; you can dress it up any way you want but that is the basic fact.

[KG]

Sorry Sinbad but that's what I got when I transferred 15000 Euro's earlier this year with Transferwise but let's not split hairs heh?? you know what I mean.

It's no good saying , well it will be ok in two years time when you need the money today is it?

The rate has been falling steadily since November last year (before the Brexit vote) http://www.xe.com/currencycharts/?from=GBP&to=EUR&view=2Y apart from a rally around May, and if Transferwise gave you a rate so much better than the interbank rate then I must look them up next time I need to transfer, as CurrencyFair always quote a tiny amount less than this rate.

Certainly it is better to transfer when rates are higher, but when you earn in one currency and spend in another you are always going to be a slave to the exchange rate. Exchange rates frequently go up and down. If you live from hand to mouth then that is going to be a problem as some will have found over recent years. Brexit is far more important than the current volatility of the exchange rate, caused by uncertainty over the timing of the Brexit and the Bank of England's decision to make things worse by symbolically reducing the interest rate from almost nothing to very nearly nothing - and then wondering why people are not saving.

Look on the bright side. FTSE is almost at a ten year high, half the world is queuing to trade with the UK - even the US, which Obama threatened would put Britain at the back of the queue (which was the trigger that made me apply to vote) is already starting negotiations.

[panoscouse]

Can someone please explain to me what this 1971 vote was? I don't remember any voting taking place in 1971 other than for local council elections.

Maybe it's a case of, think of a date to try and justify a worn out argument when the actual facts are forgotten about or irrelevant to the point being made.

[tony23]

Graham, it matters not what the pound was worth 6 months ago or one year ago. What's relevant is how how much the value has deteriorated as a direct consequence of Britain's decision to leave the EU. Other factors could still cause it to go lower, beneath the new benchmark which has been set.

For most small to medium-sized companies I think it is more than a little optimistic to envisage that exporting to far-flung countries like Australia, Canada and the USA can ever hope to replace trade with the UK's very near neighbours in Europe.

Spot on, Lloyd.

[Jim B]

KG
Hope you are well

My salary is paid in pound sterling so I'm not unfamiliar with the ups and downs of exchange rates and do transfer large amounts through Transferwise every month; I highly recommend them.

There are unfortunately many now who are living hand to mouth due to the exchange rates on offer; I know my one and only neighbour recently sold up due to the fact that the budget he had set in 2002 wasn't sufficient in 2016 to live comfortably. With all the best plans in the world we can't all be prepared for every eventuality and many cannot wait until everything is sorted out which to my mind is going to take years and years, if ever.

[Jeffbinin]

Can someone please explain to me what this 1971 vote was? I don't remember any voting taking place in 1971 other than for local council elections.

Maybe it's a case of, think of a date to try and justify a worn out argument when the actual facts are forgotten about or irrelevant to the point being made.

I think the date intended is 1975, when the Common Market referendum was held.

[KG]

Graham, it matters not what the pound was worth 6 months ago or one year ago. What's relevant is how how much the value has deteriorated as a direct consequence of Britain's decision to leave the EU. Other factors could still cause it to go lower, beneath the new benchmark which has been set.

For most small to medium-sized companies I think it is more than a little optimistic to envisage that exporting to far-flung countries like Australia, Canada and the USA can ever hope to replace trade with the UK's very near neighbours in Europe.

Spot on, Lloyd.

No 'benchmarks' have been set, the exchange rate has always been volatile and subject to market forces. Furthermore you don't have to belong to the EU in order to trade with it. The principle members of the EU, France and Germany, will be falling over themselves to trade with Britain, because without that trade their economies would collapse. Holland too has today indicated a willingness to continue its trade relationship with Britain. What it needs now is for the process to start, as simply talking about it does no-one any good.

There are unfortunately many now who are living hand to mouth due to the exchange rates on offer; I know my one and only neighbour recently sold up due to the fact that the budget he had set in 2002 wasn't sufficient in 2016 to live comfortably. With all the best plans in the world we can't all be prepared for every eventuality and many cannot wait until everything is sorted out which to my mind is going to take years and years, if ever

Hi Jim. Thanks for the good wishes. I am still on the mend. Long may it remain so.

There have been many who have come to Cyprus with unrealistic expectations, based their budget requirements on a single point in time, and come badly unstuck.

Even in the good times, which came crashing to an end with the banking collapse of 2008, it was necessary to budget for an exchange swing of +/- 20%. If your neighbour was struggling on today's rate, he would have been really strugling in 2011 when the rate was close to parity with the Euro, and that had nothing to do with Brexit, and everything to do with an economy expected to run on unsustainable levels of government and personal debt.

The banking crash cost many of us a lot of money. Even without Brexit, since the 2008 crash exchange rates have been volatile and at times much lower than at present. There is no doubt that they will remain so, and no chance of changing that until Britain actually leaves the EU.

It will have been worth it, for the sake of my family, even if I don't live to reap the rewards personally. Pessimism isn't helping, except to make yourself miserable. 17 million plus people voted to leave the EU, I am sure there were many different reasons for their votes, not all of them sensible, but I have not yet met one of them who regretted the choice, and all are urging the government to get their collective fingers out and make it happen.

[Happy in Cyprus]

From Sky News. My bold. Many of us were making these points BEFORE the vote which resulted in Brexit.

Graham, the reason GBP started falling well before the Brexit vote was because of the uncertainlty and fear of the unknown. As you well know, markets hate uncertainty. And I used the word 'benchmark' in very general terms; of course there is no formal benchmark.

Access To Single Market Not Enough, Says Report

Sky News10 August 2016

Britain will be worse off financially if it fails to negotiate full membership of the single market following the Brexit vote, according to a new report.

The Institute for Fiscal Studies has pointed out the difference between having membership of the trade bloc and settling for "access".

The think tank says that leaving the EU will free the UK from an estimated £8bn a year in budget contributions but warns that the loss of trade could hit tax receipts by a larger amount.

The EU accounts for 44% of British exports and 39% of service exports and even a host of new trade deals would be unlikely to make up for the loss of this, the IFS found.

However, full membership of the single market could add a potential 4% to the country's GDP, removing trade barriers such as licensing and other regulations that affect the supply of goods and services.

IFS research associate Ian Mitchell, said: "Membership is likely to offer significant economic benefits, particularly for trade in services."

On the other hand, the report said that access to the single market was "virtually meaningless", adding: "Any country in the WTO - from Afghanistan to Zimbabwe - has access to the EU as an export destination."

"Single market membership, by contrast, involves elimination of barriers to trade in a way that no existing trade deal, customs union or free trade area achieves.

"Membership may come at a cost of continuing to contribute to the EU budget and accepting future regulations designed in the EU.

"Those costs are salient and the benefits of membership are diffuse - but the financial benefits are real and, at the moment at least, likely to outweigh the financial costs."

Norway is a member of the European Economic Area - the single market - without being a member of the EU but it must still make a financial contribution and accept most EU laws and free movement.

[KG]

the reason GBP started falling well before the Brexit vote was because of the uncertainty and fear of the unknown.

Right up until the vote was counted the world and his dog believed that Britain would remain in the EU. You can't blame Brexit for what was happening in the previous November. In May there was even a short-lived rally in the value of the pound. I suppose that was Brexit too?

As for the rest, it's merely conjecture from the same discredited 'experts' who have got it wrong so many times before.

[panoscouse]

Can someone please explain to me what this 1971 vote was? I don't remember any voting taking place in 1971 other than for local council elections.

Maybe it's a case of, think of a date to try and justify a worn out argument when the actual facts are forgotten about or irrelevant to the point being made.

I think the date intended is 1975, when the Common Market referendum was held.

I notice the edits. But nobody voted to join in 1975 that was to remain or leave. We joined the Common Market in 1973 without a choice.

[lion]

Post-Brexit BOOM: Housing market has surged since the referendum, data shows

http://www.express.co.uk/news/politics/ ... time-buyer

Businesses and banks are 'talking DOWN the economy to justify their Brexit warnings'

[Jim]

And the pound falls again to 1.16 euro..

They must have very big mouths.

[coggle123]

I doubt that will make up the £700million deficit in the MOD budget due to the fall in the pound against the dollar

[Jim B]

Post-Brexit BOOM: Housing market has surged since the referendum, data shows

http://www.express.co.uk/news/politics/ ... time-buyer

Businesses and banks are 'talking DOWN the economy to justify their Brexit warnings'

You couldn't make it up

[tony23]

[quote="lion"]Post-Brexit BOOM: Housing market has surged since the referendum, data shows

http://www.express.co.uk/news/politics/ ... time-buyer

Businesses and banks are 'talking DOWN the economy


You may not have noticed but we don't export houses. It is not surprising that this market is essentially affected by internal market forces. Additionally this wouldn't be the first time Sir Bernard has opened his mouth and put his foot in it.

[lion]

Thanks tony23 sarcasm is cheap.

The point I am making the doommongers were predicting a house price crash.

[coggle123]

Perhaps the "Zoopla Index" should have had a quiet word with the Royal Institute of Chartered Surveyers before they suggested the "boom"

It has just been reported on BBC Breakfast that the RICS has stated that the number of homes on the market is at a record LOW for 3years, demand & sales are down in July as prices are rising at the slowest rate for 3years & are not rising in all areas.
Prices in London
East Anglia
West Midlands & the North of England are falling outright.

Project Lies should have learned a lesson by now surely before putting their foot in it again!

[coggle123]

Perhaps the "Zoopla Index" should have had a quiet word with the Royal Institute of Chartered Surveyers before they suggested the "boom"

It has just been reported on BBC Breakfast that the RICS has stated that the number of homes on the market is at a record LOW for 3years, demand & sales are down in July as prices are rising at the slowest rate for 3years & are not rising in all areas.
Prices in London
East Anglia
West Midlands & the North of England are falling outright.

Project Lies should have learned a lesson by now surely before putting their foot in it again!

[coggle123]

Perhaps the "Zoopla Index" should have had a quiet word with the Royal Institute of Chartered Surveyers before they suggested the "boom"

It has just been reported on BBC Breakfast that the RICS has stated that the number of homes on the market is at a record LOW for 3years, demand & sales are down in July as prices are rising at the slowest rate for 3years & are not rising in all areas.
Prices in London
East Anglia
West Midlands & the North of England are falling outright.

Project Lies should have learned a lesson by now surely before putting their foot in it again!

[tony23]

Thanks tony23 sarcasm is cheap.

The point I am making the doommongers were predicting a house price crash.

I truly regret you think my remarks were sarcastic as I had no intention to be so. I was simply emphasising a point that you had appeared to miss. Perhaps the above postings will help to clarify the matter. Newspapers are in business to sell their products and some are not too particular about how they choose to present their "facts".

I repeat - no sarcasm intended as I agree it is not only cheap but used only when the point is lost.

[Admin]

Seen all of this on Cyprus, in fact the property market is still very depressed for those who wish to sell on, the UK is not immune from this and now Brexit is hitting home and the pound is losing ground, where are those advocating this is a good thing for the UK economy, probably the worst self inflicted vote there has ever been in UK history. Time of course will tell, but remember UK pundits are only guessing one way or the other..

Meanwhile those on UK state pensions are suffering every time they have to exchange from the pound to the euro, lets all hope for those of us in this position the £ does recover and fast.

This morning the rate is 1.00 GBP = 1.16264 EUR

http://www.xe.com

[ASHTON]

Admin wrote

"the worst self inflicted vote there has ever been in UK history".....History will prove how right you are

[295Russ]

One advantage is that with the pound been lower you will pay less Cyprus tax on your UK income(s)/pension(s)!

[trevnhil]

I get nowhere near enough to pay any tax, so that will not cheer me up .


Trev..