What Does the Result Means for Brits & the GBP

What Does the Result Means for Brits & the GBP

After weeks of campaigning and at the end of a rollercoaster year the UK has voted and confirmed Boris Johnson as their champion PM to deliver Brexit. But what does this means for Brits looking to buy property overseas and also for the UK currency? Here’s out thoughts …

The Conservative Party controls 365 seats which has provided Boris Johnson the majority that he was so desperately hoping for. He is now expected to put his Brexit deal back to parliament before Christmas (which is now likely to pass) and takes the UK out of the European Union before the end of January 2020.

So it’s certain, Brexit is going to happen and the UK will leave the EU, we think this is sad but we accept it (with regrets). There’s still a lot of uncertainty on the government negotiation strategy and it’s genuine aim, especially as it’s looking to enshrine a deadline to leave before 31st december 2020 into law.  Some believe there simply isn’t enough time to conclude a deal with the EU before of 2021, which may see the UK crash out of european union without a deal which could mean a hard Brexit, possibly on WTO terms.

This has resulted in the UK sterling returning to pre-elections levels against most currencies including the euro and the US dollar. We expect the GBP/EUR rate to hover around the 1.15 mark for the early part of the new year, possibly less depending on retail, unemployment and inflation figures post Christmas.

The current GBP/EUR exchange rate is marginally better than what is has been since the result of the referendum (see image, source BBC business), yet below what most analysts and city bankers would have hoped for after such a resounding victory at the elections. It remains to be seen if and how Boris Johnson’s government are going to deliver the promises made during the campaign and what type of Brexit the UK is going to end up with.  

The other certainty is that regardless of the type of deal the UK seeks and seals, it will take at least 10 years to be full done, probably longer if you look at the pace of the latest negotiations. That’s a very long wait to find out especially if you add the last years since the referendum.

Here at MFH we believe that the election results mean the UK will probably negotiate a softer agreement as the PM will want to keep his many those new voters happy, as well as the Queen and Scotland, while at the same time the EU will possibly be more lenient with the aim to moving on efficiently in the interest of all parties.

If this scenario was to happen then we wouldn’t be surprised to see the GBP/EUR surge to around 1,25 in spring time (and possibly more) as the positive signals keep reassuring UK/EU citizens and investors from all over the world. It's worth shopping around and talking to different currency specialists early so you can be best advised and plan in advance (as well as saving money).

There you have it, that’s our prediction and we’re looking forward to finding out more in the coming months. Look out for your next blog post about the outlook for the French real estate market in 2020 and keep an eye on our latest properties and price reductions here.

Wishing you a Fabulous Christmas and Happy New Year.  Joyeuses Fêtes …