Will the UK and the pound enjoy an Olympic boost?

The UK is basking in Olympic glory at present and shrugging off those Brexit blues. For now consumers are spending and the economy has a healthy unemployment picture. This good news is very much welcome and reminds us all of the power of hard work, determination and training. The Olympics will have helped raised the UK’s profile internationally and could help boost tourism particularly with the pound at such low levels. Measuring the true impact of all of this in an economic sense is actually very difficult and in my opinion it would be misplaced to be overly complacent about the future direction for the pound.

An important point to make is that whilst the weak pound is good for exports it is not overall a benefit for the UK since the UK as a net importer buys more from overseas than it sells. That means because we spend more overseas when the currency is weak it is overall a bad thing. That is not to say a weak pound doesn’t present opportunities, many businesses selling overseas will be enjoying the weaker pound and there have been some headline grabbing stories of UK companies being purchased at a discount because of the weak pound.

The key news for me is the business surveys since the Brexit vote, these are the key indicators because ultimately it is business that drives the economy forward. Business is the key barometer of what will happen next. Consumers will not keep spending when the weather turns and they are worried about their job, it will be business’ reaction to the the economy which will shape what happens next. With hiring down and confidence lower I can see the pound coming under further pressure in the coming weeks and month, any clients buying a foreign currency with the pound should not be overly complacent.

If you are buying or selling the pound exchange rates remain volatile and there are various upcoming events to help determine the next leg of direction on the pound. Brexit news is unlikely to develop quickly, indeed we are probably going to need to wait until 2017 to learn just what is happening next. In this time as confidence is sapped, so too sterling should fall.

If you have a transfer to consider making some firm plans in advance is sensible. If you are considering buying or selling the pound then understanding all of your options is key to mitigating the uncertainty. To learn more please fill in the form below or if you prefer a direct contact with me please email [email protected]

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