FIND YOUR LOCAL BUYERS' ADVOCATE:
    TALKS & PODCAST           CALL US CALL US
1300 655 615
 
 

The
Propertybuyer

Podcast

Hear the latest weekly insights into the property market via podcast by Rich Harvey, CEO and founder of Propertybuyer.

 
Fri 29 Nov '24 with Rich Harvey How to Make Better Financial Decisions
 
 
Fri 15 Nov '24 with Rich Harvey How Will the Future of the Real Estate Industry Evolve?
 
 
Fri 1 Nov '24 with Rich Harvey Sydney’s Lower North Shore - Perspectives and Insights
 
 
Fri 20 Sep '24 with Rich Harvey How to Invest or Buy Commercial Property
 
 
Fri 6 Sep '24 with Rich Harvey Breaking Gender Barriers, Creating Empathy & Other Empowering Strategies
 
 
Fri 23 Aug '24 with Rich Harvey Where to invest for around $500k?
 

 

Listen to many more
podcasts on our
Podcasts page.

 
 
 

Propertybuyer Blog
Property advice, market updates & more

 

What does the new Prime Minister mean for Brexit and the pound?

August 12, 2019 / Written by Rich Harvey

 

By Guest Blogger, Sue Watts,

Moneycorp

 

With three months to the Brexit deadline, we take a look at the possible impact of any developments.

The announcement of Boris Johnson as the new leader of the Conservative Party and, by default, the UK’s new Prime Minister met with a subdued reaction from the currency markets. There was little reaction from the pound on the day, but sterling has been under pressure for some time due to the political uncertainty.

 

What happened to the pound during the leadership race?

After Theresa May announced her resignation towards the end of May, the pound dipped against the euro. During the televised debates between candidates, the pound dropped slightly as few in the running appeared to rule out a no- deal Brexit. By the time of the debate between the final two candidates – Boris Johnson and Jeremy Hunt – Brexit rhetoric had intensified, with both candidates pledging to leave the EU by 31st October regardless of the consequence and the pound took another tumble after the debate aired.

As the date of the announcement grew closer, the pound faced a perfect storm of negative factors on 16th July; ecostats showed that the economy was slowing down, business confidence was waning and the pound was harried by uncertainty over the outcome of the leadership elections and Brexit. While the pound didn’t react to the announcement of the new PM, it was clear that removing some measure of uncertainty wasn’t enough and the pound remained under pressure and hovering not far from its lowest level since April 2017.

 

What next for sterling and Brexit?

It appears that at the moment, both the fate of Boris Johnson as PM and the fate of the pound are tied to Brexit. Rumours of positive developments which lead to a new departure deal should prove positive for both; increased likelihood of a no-deal departure from the EU will cause added pressure. Parliament has repeatedly rejected the idea of accepting a no-deal Brexit and many of those objecting come from the Conservative Party.

The election of Jo Swinson as leader of the newly revitalised Liberal Democrats and her determination to oppose Brexit,

together with the challenge of The Brexit Party insisting that the UK’s Prime Minister sees the process through, means that Johnson faces challenges from all sides in parliament. His swift action to appoint a new Cabinet – which included a swathe of resignations and departures as well as the return of some controversial figures – suggested a PM with determination and sterling firmed as a result.

However, Johnson may have been in a brief honeymoon period and concrete action will be needed to back his rhetoric and political manoeuvring. After the European Elections saw both the Conservatives and Labour lose seats to pro- and anti-Brexit parties, it’s clear that if another general election is called, there will be further market volatility ahead as the unprecedented circumstances will make the outcome difficult to predict.

 

No deal is a big deal for the pound

The most significant influence on the pound at the moment is the prospect of the UK leaving the EU without a deal. This is causing the pound to fall against the euro and the US dollar. Some analysts have warned that the pound may reach parity with the US dollar if the UK does opt for a cliff- edge Brexit. Boris Johnson claims this is a last resort, but the new PM’s refusal to rule out such an outcome is causing some nervousness in the market and this is putting a lot of pressure on sterling.

If the current rhetoric continues and is taken into the negotiations, the pound may have some difficult days ahead. The next three months are likely to see significant volatility; it’s likely the market will seize on any positive news regarding the progress of the negotiations, but may have further to fall if the new team meets the same impasse regarding the Irish border.

To find out more about our foreign exchange and global payment solutions for businesses, you can view our brochure here: https://www.moneycorp.com/globalassets/documents/uk/corporate/marketing/corporate-solutions-brochure-2019.pdf

Sue Watts is a currency specialist for moneycorp, supporting people and businesses with a range of currency transactions. www.moneycorp.com/en-au

  

 

  To have one of our friendly Buyers' Agents to contact you in regards to buying property from overseas:

Send us your property brief   or

call us on 1300 655 615 today.

The Propertybuyer
Podcast

 
Fri 29 Nov '24
with Rich Harvey
How to Make Better Financial Decisions
 
 
Fri 15 Nov '24
with Rich Harvey
How Will the Future of the Real Estate Industry Evolve?
 
 
Fri 1 Nov '24
with Rich Harvey
Sydney’s Lower North Shore - Perspectives and Insights
 
 
Fri 20 Sep '24
with Rich Harvey
How to Invest or Buy Commercial Property
 
 
Fri 6 Sep '24
with Rich Harvey
Breaking Gender Barriers, Creating Empathy & Other Empowering Strategies
 
 
Fri 23 Aug '24
with Rich Harvey
Where to invest for around $500k?
 

 

Listen to many more
podcasts on our
Podcasts page.