The pound has hit a six month low in grim news for UK travellers exchanging their sterling to euros ahead of the start of the school summer holidays. GBP is being “tied by Brexit developments” according to currency experts, who do not forecast an improvement in the rate today. The pound is currently trading at 1.106 against the euro, according to Bloomberg, at the time of writing. Michael Brown, senior currency analyst at Caxton FX, told of the impact of the UK political scene on the grim currency conversion rates.
He told Express.co.uk: “Sterling fell to a fresh six-month low against the single currency on Tuesday as markets once again priced in the risk of a no-deal Brexit.
“The chances of such an outcome appear to have markedly increased over the past 24 hours, with both Conservative Party leadership contenders declaring the Irish backstop ‘dead’, seemingly blocking the route to further UK-EU negotiations.
“Sterling’s fall was exacerbated by mid-afternoon reports that Boris Johnson was investigating the suspension of Parliament to force through a no-deal exit.
“Despite increasing Brexit uncertainties, data showed the UK labour market remaining tight, with wages increasing at a strong pace, though this did little to arrest the pound’s fall.”
He added: “Turning to the day ahead, focus will continue to centre on ongoing political developments as the race for Number 10 enters the final straight.
“However, economic fundamentals will also be in focus, with June’s inflation figures set to be released.
“Data should show CPI increasing at 2.0 per cent on a year-on-year basis, in line with the Bank of England’s target.
“The release is unlikely to have a significant impact on the BoE’s outlook though, with policymakers’ hands tied by Brexit developments.”
The pound has not yet reached the same levels as prior to the Brexit referendum, in 2016.
Talks of a no deal Brexit – where the UK would leave the EU without a deal – have prompted a slump in the exchange rate while the possibility of a Brexit withdrawal deal has, comparatively, sent sterling soaring.
Meanwhile the pound is not faring better against the dollar, for those headed to the US for their holiday.
Michael added: “Sterling continues to come under significant pressure, falling to more than two-year lows against the dollar today, as the prospect of no-deal Brexit increases once again.”
He warned of “pressure” for the currency earlier this week in a grim prediction which is coming true.
In an attempt to help out Britons frustrated by the financial situation, foreign currency expert Peter Rudin-Burgess from CompareHolidayMoney.com has given his top tips for this summer.
He said: “Go online for the best rates. Online providers have lower overheads and you can save around £40 per £1000 spent if you buy online compared to the high street.
“If you don’t want to wait in for home delivery, you can still take advantage of the online rates by using a ‘click & collect’ service that many providers supply.
“Order online and walk into a store to collect in person all whilst getting the better online rates.
“Examples of best places to click & collect include: eurochange, Ramsdens, No1 Currency, Post Office.”