After more than two years of build-up, the UK is set to formally leave the EU on March 29th with the impact of the once-in-a-generation decision likely to ripple across the EU and have a lasting impact on Britons living throughout Europe.
While negotiations are still underway (making it difficult to determine exactly what that impact will be) there’s already one notable Brexit aftershock influencing the day-to-day life of expats in France…
We’re referring, of course, to the dramatic shift in the GBP/EUR exchange rate in the years that have followed the EU referendum and how this has affected currency transfers for anyone moving money between the UK and France.
Since the vote we have seen GBP/EUR plummet from roughly €1.30 to an average of around €1.13. This has resulted in the value of a transfer of £2000 falling from €2,600 immediately before the referendum to just €2,260 at the current rate (as of November 2018).
Now, with just a few short months left to go before Brexit, economists are only expecting this volatility in the Pound to increase.
The main focus is currently on whether or not the UK will be able to secure a withdrawal agreement with the EU, with a no-deal Brexit expected to result in another sharp drop in Sterling – and some analysts even suggesting it could push the Pound close to parity with the Euro.
Understandably, such a drastic movement in GBP/EUR is likely to have a considerable impact on any expats living in France whose income is still delivered in Sterling, such as anyone receiving a UK pension.
Conversely should the UK reach a comprehensive withdrawal agreement with the EU it’s likely to prompt a Sterling surge.
While this would be positive for anyone transferring money to France, it does mean the generous exchange rate expats currently enjoy when transferring money back to the UK is likely to worsen.
Because of the elevated uncertainty and its potential impact on exchange rates expats may want to look into their available transfer options, with reputable currency specialists like TorFX offering a variety of services to help minimise exposure to adverse shifts in GBP/EUR.
One such service is a forward contract, which allows you to fix an exchange rate for up to two years, ideal for any expats planning a move back to the UK in the near-future but fearing a Brexit deal will weaken EUR/GBP.
If you don’t have any immediate plans to make a transfer but wish to stay abreast of all the latest Brexit developments and how they impact the Pound you may wish to consider signing up to receive TorFX’s daily updates, which are designed to help expats time their transfers effectively.
It’s difficult to predict exactly what impact Brexit is likely have on the day-to-day life of expats, buy by thoroughly considering your transfer options you’ll be better prepared for any outcome.
If you need a quote for a currency transfer, get in touch