Jason Moore16/01/2017 00:00
TW
1

Well, the pound sterling hit a new low against world currencies today on talk that the British government is planning a "hard Brexit", in other words Britain will leave the single market. Now, every cloud has a silver lining! British exports to Spain are now far cheaper than they were 12 months ago, which will help the local nautical industry. You never know British food products might even get cheaper as well! Overall, a low pound is good for the British economy, but obviously there are some quite major disadvantages such as tourism. The cost of a holiday to Majorca, if you were booking today, now costs a lot more.

Sterling was always going to be one of the big casualties of Brexit; we were warned as much during the referendum campaign. Theresa May will be making a keynote speech tomorrow in which she is expected to hint at a hard Brexit for Britain which is the only real solution. I can't see Britain accepting an "EU open border" and I can't see Germany supporting a "closed border United Kingdom". In some ways perhaps this will end all the uncertainty and in the long run it could be good for the value of sterling against the euro. In other words, looking at the sterling/dollar rate today, I think it is a question of things can only get better. In the meantime if you have euros, now is the time to head for Britain for a holiday, despite the weather!