What Impact Will Sunak’s Plans Have on Pound to Euro Rates?

Confidence in Euro Grows Although Euro to Pound Remains Flat

The pound to euro exchange rate managed to hold on to some of it recent gains, creating some good short term opportunities to buy euros with pounds.

The news from the Brexit talks appear to be moving slowly in the right direction which has given the Pound some much needed support. The EU chief negotiator Michel Barnier has been meeting with our own negotiator David Frost and there has been some positive news that things are moving in the right direction with suggestions of a ‘landing zone’ being discussed. The rumours are that an agreement is aiming to be in place by the Autumn. However, we have already had a four-year period since the Brexit vote back in June 2016 so the question is will the two parties be able to get a deal over the line in time?

As of tomorrow, UK travellers retuning from countries with air bridges, many in Europe, will not have to face a two week quarantine which was previously introduced a few weeks ago. This will allow both holidaymakers as well as those individuals looking to buy and sell homes in Europe some good news after having been affected by lockdown over the last three months.

Yesterday the UK Chancellor Rishi Sunak set out plans to get Britain back to work with plans to restart the economy having been announced. The Chancellor has increased the threshold for stamp duty which has been increased to £500,000 which should provide the property market with a short term benefit as it may encourage people to move faster than previously anticipated.

Sunak also announced plans to aid the leisure and tourism industry by introducing a plan to allow people to eat out with £10 meal vouchers for Monday through to Wednesday during the month of August for participating restaurants.

Although we may not see the immediate benefits this may encourage more people to step out of their homes once again and we could see this being reflected in September when we see the up to date figures for consumer spending which in turn could have a positive impact upon retail sales as well as UK GDP.

The Pound Euro remained within a fairly tight range during yesterday’s trading session but already this morning the Pound has increased against the Euro which is an encouraging sign for anyone looking to convert pounds into Euros.

Unrest in the Eurozone?

Turning the focus to the continent and yesterday the president of the European Central Bank Christine Lagarde claimed that the central bank will use part of the bank’s recent allocation of funds to be used in an attempt to combat climate change. This will be aimed at helping companies that are showing willing to improve the environment.

The European Union are still yet to agree how to split and therefore fund the €750bn package for the pandemic. The next summit is due to take place on 18th July so we could see some problems ahead for the euro vs the pound if there remains a dispute between the various nations involved as to how to fund this equitably.

Germany, Netherlands and Finland all appear to be in similar agreement as opposed to Italy, Spain and Greece that have different opinions as to how it should be funded. As we saw many years ago with the southern countries of Europe this caused the euro to weaken so make sure you pay close attention to how this meeting may impact GBPEUR exchange rates in just over a week’s time.

If you have a currency transfer and want to be kept up to date with movements or would like a free quote compared to using your own bank then contact me directly using the form below, I’ll be happy to respond personally.