With Britain’s future trade relationships in question, and a no-deal Brexit looming on the horizon, the government has been preparing for post-Brexit agreements in an attempt to minimise the effects of Brexit.

New Zealand and Britain trade deal

On Monday, Britain’s Trade Minister Liz Truss said that striking a trade deal with New Zealand would be a priority, as officials are working to create continuity and support their non-EU trading partners. Truss, is on a three-nation tour, which includes New Zealand, Australia and Japan, a trip that hopes to pave the way for trade negotiations after Brexit. Ahead of her trip, Truss said: “We’re going to be leaving the European Union on October 31 with or without a deal and as part of that agenda, striking trade deals much more broadly than we have been doing is going to be vitally important. Striking a free trade deal with New Zealand is a very important priority for the UK. It’s one of the first trade deals we expect to strike.”

Official data shows that trade between New Zealand and Britain is at about NZ$6 billion (£3.1 billion), with New Zealand being Britain’s 43rd largest trading partner in 2017.

New Zealand’s Trade and Export Growth Minister David Parker said that he wanted to find a way that will retain the existing advantages of New Zealand traders despite Brexit. Parker said that among the subjects discussed, were finding ways to cooperate such as Britain’s potential accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

Businesses preparing for Brexit

If the UK leaves the EU without a withdrawal agreement, it will be treated as a non-EU country. For this reason, it is significant that businesses in the EU prepare for this eventuality, if they have not already done so. Businesses that sell to, buy from, or move through the UK, goods, supplies or services will be affected.

Customs duties and restrictions

Without a transitional period, the UK will revert to the WTO rules. This will mean “declarations will have to be lodged and customs authorities may require guarantees for potential or existing customs debts; Customs duties will apply to goods entering the EU from the United Kingdom, without preferences. Prohibitions or restrictions may also apply to some goods entering the EU from the United Kingdom, which means that import or export licences might be required.”  No longer valid will be UK import and export licences, UK authorisations for customs simplifications or procedures and Authorised Economic Operator (AEO) authorisations. There will be VAT charges for imports of goods entering the EU from the UK, while exports to the UK will be exempt from VAT. Additionally many rules regarding declaration and payment of VAT will change.

It won’t be easy to move goods to the UK, as that it will require an export declaration. Movement of excise goods from the United Kingdom to the EU will have to go through customs before a movement under Excise Movement and Control System(EMCS) can commence.

UK businesses

UK businesses then that export, import or move goods and services through the UK will need to prepare by completing relevant documents so that the transition to post-Brexit Britain is as smooth as possible.

If you are an importer or exporter and are concerned about the weakening pound as well as unpredictable political developments regarding Brexit, get in touch with Universal Partners FX. UPFX can assist you with the complexities of cross-border payments and regular transfers, as well as hedge your funds against volatile currency market movements. Give them a call today to find out how they can help you save on your international currency transfers.

No-deal Brexit might loom on the horizon, but this has not deterred many Brits from buying or considering to buy property abroad.

When it comes to Brexit, the latest release of a government document outlining “reasonable worst case scenarios” in the case of a no-deal Brexit on 31 October, has left many shocked. While the government resisted the publication of the so-called Operation Yellowhammer document, the six-page document which is dated 2 August and was leaked to the Sunday Times last month, warns of a three-month disruption at Dover and other channel crossings, public disorder and shortages of fresh food.

Buying in France

While the political landscape in Britain is chaotic, with the prospect of a no-deal Brexit looking more threatening day by day, many Brits are considering moving to France.

As the British parliament is trying to stop a no-deal Brexit, many European countries, including France, Spain and Germany are preparing for Brexit.

The French government and customs authorities will test a period before Brexit to judge the preparedness of companies in the case a no-deal Brexit. According to Gerald Darmanin, the French minister in charge of overseeing the customs agency, French companies which conduct their business in Britain will have to present their plans online, make their declarations to customs officers and open up their shipments to inspectors.

He explained that countries doing business with Britain should be prepared to deal with the country as if it was “South Africa.” He also explained that, “For a month, we are going to act as if there is Brexit for a large number of companies. We’re going to put in place a sort of general rehearsal, so that we are ready at the end of October.”

With more than 4 million trucks going through the northern port of Calais every year, businesses have been used to frictionless trade without having to deal with customs controls and borders. For this reason, many fear that a no-deal Brexit would cause chaos at the borders creating uncontrolled traffic. In this respect, customs officers' numbers will increase by 700, while the customs agency is practicing all through September to prepare.

Residency rights for Brits

According to The Local, France will launch a new online platform in October so that Brits can apply for their carte de séjour residency permits. The French Prime Minister Edouard Philippe, stated: "The Ministry of the Interior will launch an online registration platform for British nationals living in France in October." The website will be in English and Brits will be able to complete their application online, scan in all relevant supporting documents and then receive a receipt for their application, with only one in-person appointment for fingerprints. This appointment can be done at préfectures, sous-préfectures or local mairies. Some prefectures have closed applications as they don’t know yet what will happen with Brexit, while others are processing applications within weeks. The online application system can be used by Brits already living in France on the day of Brexit.

The French government and the British embassy have advised British residents in France, living there for more than five years, to apply for cartes de séjour residency permits.

After Brexit, all British people will apply for residency rights, in the same way that third-country nationals do. While a no-deal Brexit will allow for a one-year grace period, applications should be sent within six months of Brexit day. On the other hand, if there is a deal in place, there might be a transition period until December 2020. For those who already have a carte de séjour permanent they will be able to exchange it after Brexit. More information is regularly updated on the French government’s website.

Kalba Meadows from the British in Europe citizens’ rights’ group said: "We were given to understand last year that there would be a centralised application platform, and this was confirmed in the table produced by the European Commission in June, so while it's not 'new news' for us it's good that a timeline will now been put into place so that the process can begin as soon as possible. It's going to be a mammoth task processing applications from up to 200k Brits in France. As ever, the devil is in the detail though - and we understand that although applications will be made on a central online platform they will still be processed by individual préfectures, many of which will struggle to meet the demand without extra resources.”

For the French government a no-deal Brexit is the most likely scenario, with officials expecting an economic slowdown.

Universal Partners FX

If you are considering buying a property abroad amidst Brexit preparations and uncertainty, you should also be prepared and secure your funds. If you don’t want to worry about currency volatility and future exchange rates, you could fix your rate today. Universal Partners FX can help you hedge your funds, get access to the best exchange rates and transfer your funds fast, securely and cheaply. Give them a call today to find out more about international currency transfers and saving costs.

The release of the UK's GDP with a better-than-expected 0.3% growth in July, has raised chances of the UK avoiding a recession and boosted the pound. Data from the Office for National Statistics showed that all sectors of the economy grew in the month – the first of the third quarter, with manufacturing also expanding by 0.3%, and the industrial sector growing by 0.1% during the month. However, the last three months the GDP has remained flat, as Brexit uncertainty has impacted on investment.

This is why, despite Brexit recession fears having eased, the economy remains under pressure. For example, the services sector growth might be an indication that businesses are stockpiling in preparation for Brexit as its outcome continues to be unknown. Plus, as many economists indicate, it is unclear for how long growth will continue.

KPMG report  

As accountancy firm KPMG forecasted, there is a possibility of Britain falling into a recession in 2020 if it leaves the EU without a deal. According to the firm, a no-deal Brexit will negatively affect the UK’s trade and business confidence and lead to the economy shrinking by 1.5% in 2020. The accountancy giant is not the first to warn of the negative effects of Brexit on the economy, as experts have already underlined the grim economic outlook for Britain.

Forecasts by the Bank of England and the Office for Budget Responsibility, have also highlighted the negative economic consequences of a no-deal Brexit and, consequently, of losing access to the EU single market and customs union.

The possible recession will cause a rise in unemployment, a decline in consumer spending and an estimated 6 percent slide in house prices, the KPMG report added.

Yael Selfin, the  KPMG’s chief economist noted that in the case of a recession resulting from a no-deal Brexit, the decline in the pound’s exchange rate will “push up inflation to above the Bank of England’s 2 per cent target, potentially forcing the central bank to lower its key interest rate to near zero.”  With the central bank’s key rate currently standing at 0.75 per cent, interest rate cuts will possibly be no higher than 1 percentage point.

The report also said: “[The new government’s] resolve to leave the EU by 31 October has become increasingly clear . . . and the proximity of the date make the outlook for the next two years rather bipolar.” KPMG added that the pound’s 10 percent expected decline in value, will hurt even exporters as issues over borders will eliminate any positive effect the weaker currency might have. Selfin said: “The most damaging impacts could come from potential shortages of imported foodstuffs as well as medicines in the immediate term, negatively impacting households’ sentiment.”

Selfin could not be clearer when discussing the damaging effects of a no-deal on the economy: “With the Brexit debate poised on a knife-edge, the UK economy is now at a crossroads. It is difficult to think of another time when the UK has been on the verge of two economic out-turns that are so different, but the impact of a no-deal Brexit should not be underestimated. Despite headwinds such as the slowing global economy and limited domestic capacity, the UK economy now has the potential to strengthen over the next 12 months. But a no-deal Brexit could put paid to this upside, triggering the UK’s first recession for a decade.”

Government and Bank of England will be unable to stop a recession

Indeed, the outlook looks grim as the economy contracted by 0.2 percent between April and June, with investment and growth being limited. 

On Monday (9 September), the Resolution Foundation thinktank in its assessment of the UK’s readiness to respond to the next recession, said that the government and the Bank of England were unprepared and that this was a significant risk that policy makers should take seriously. As the think tank noted: “The UK’s macroeconomic policy framework has not kept pace with significant changes to our economic environment and is therefore at risk of leaving the country underprepared for the next recession. That is not a risk policymakers should take lightly.”

 In its key findings, the think tank stressed that the country was facing the biggest risk of recession since 2007, that those of lower incomes would be the most exposed to the recession and that monetary policy will be unable to provide “anything like the level of support it has previously in recessions, reflecting what appears to be a secular decline in the level of interest rates around the world.”

Importing and exporting

If you are an importer or exporter and are worried about the future effects of a weakening pound, post-Brexit border controls and other complexities, contacting Universal Partners FX is the best option for you. UPFX can save you lots of money when transferring funds abroad and can recommend hedging strategies to protect your funds. Give them a call today to find out how they can help you save on your international currency transfers and have peace of mind.

Brexit: Buying Property Abroad as Pound Tumbles

Buying property abroad has become more complex the last few years as Brexit uncertainty and the pound’s volatility continue to negatively impact the UK economy, with fears of a recession increasing.

Brexit update

On Tuesday (3/9), the pound experienced increased volatility, reaching its lowest level  in 34 years, from which it rebounded, as rebel Tory and opposition MPs attempted to block a no-deal Brexit. The prime minister Boris Jonson was eventually defeated. According to the so-called Benn bill, if he is unable to reach an agreement with Brussels in the next few weeks, he will have to delay Britain’s departure from the European Union until 31 January.

Sterling dropped due to fears of a snap general election, reaching its lowest level in more than three decades, with the exception of the October 2016 “flash crash." Ahead of the vote, and after Tory MP Philip Lee’s defection to the Liberal Democrats, it rose slightly.

“For all the uncertainty that lies ahead, markets see a Boris Johnson led no-deal Brexit as the worst-case scenario and thus treat anything that undermines that as pound positive,” said analyst at IG Joshua Mahony.

According to the Independent, a Bloomberg survey last month, showed that a delay was seen as the most positive outcome for the pound. Sterling has tumbled significantly since the EU referendum in June 2016.

Boris Johnson’s defeat by a margin of 328 to 301 on Tuesday, has put the prime minister in a precarious position, and has wounded his rhetoric of no-deal. As a result of his defeat, the prime minister said he would table a bill to trigger a general election, but Labour said it would not back his election motion, which requires a two-thirds majority to pass through the Commons.

On Thursday, the House of Lords voted in favour of getting the Benn bill, that will rule out a no-deal Brexit, through all the stages of parliament by Friday afternoon.

Buying your dream abroad

For many, the decision to buy a home abroad is not significantly affected by Brexit. They have prepared and have done their research and are confident that their decision is final. For them, consulting a leading expert in transferring money abroad has also given them peace of mind. Foreign exchange specialists such as Universal Partners FX have years of experience in international money transfers and can navigate volatile currency markets, saving you money and time. So, considering the current volatility and the weakness of the pound, getting help from UPFX will help you significantly when you make large international transfers to buy property abroad or pay related costs.

Residency rights

Due to the fact that many Brits are already living in countries such as France and Spain, and with more EU countries guaranteeing British expats post-Brexit grace periods, British expats are slightly less worried about Brexit, especially the ones already living there. As many European countries have pledged to offer legal residency rights to British expats in return for the same rights for European nationals residing in the UK, it is hard to see that certain freedoms will completely eclipsed after Brexit. For example, the Italian government has announced that British expats will remain legal residents in the event of no deal, while the Spanish authorities are saying British expats will have the same rights in Spain post-Brexit as long as Spaniards already living in the UK are offered the same residency rights.

France has also made sure to clarify its position on residency by passing a bill in the case of a no-deal Brexit, followed by a government decree. Like other European countries, France will apply these rights as long as the UK does the same for French nationals living in the UK. After Brexit, for example, Britons in France will have six months to apply for a residence card. During the one-year transitional period Brits will continue to have existing rights over residence, work and benefits, while they can enjoy access to healthcare for two years after Brexit. Remain in France and the UK government website provide more details.

So, if you are buying a home in a European country, you need to consider all the complexities of life abroad after Brexit. More importantly, as the pound continues to fluctuate, getting expert help from a foreign exchange specialist such as UPFX, will prove to be extremely beneficial especially when you are transferring your hard-earned money. Get in touch with them today for a quick quote and find out how much you can save on your international currency transfers.

With a no-deal Brexit most likely happening in a couple of months, experts have warned about how unprepared many trading companies are.  Service industries, such as finance make up 79% of the British economy and account for 45% of UK exports. A no-deal Brexit means that these service providers would lose access to European markets and might have to comply to new rules and regulations. According to Bloomberg Economics, in a “more benign no-deal scenario growth will probably slow sharply, while a more disruptive outcome would make a recession highly likely.”

The prime minister Boris Johnson has pledged to leave the EU by 31 October with or without a deal. Without a withdrawal agreement in place, the UK will crash out of the EU, lose its access to the single market and revert to the World Trade Organization (WTO) rules, having to deal with complicated restrictions and tariffs on exports. For many economists and business organisations, a no-deal Brexit will simply be disastrous for the economy.

Trading post-Brexit

While the UK has enjoyed tariff-free trade, after Brexit the UK will have to pay tariffs on UK goods and services. The change will hurt the UK economy, cause delays and increase costs and controls. Particularly, many financial companies are planning to move part of their operations to Europe to counteract the loss of access to their EU “passporting” rights and secure the smooth trading of goods and services with the rest of the world.

Similarly, UK prices will increase for EU imports such as food and cars. Cars will get a 10% tariff, clothes and linen a 12% tariff, while the UK will impose import quotas on beef, lamb, fish, poultry and swine.

The Bank of England has warned that Britain has one in three chance to plunge into a recession the beginning of the next year, as uncertainty over Brexit continues to affect the economy. In this climate, British businesses are stockpiling goods or plan to do so, as a hard Brexit will create problems at ports and hurt supply chains.  

Trading companies not prepared for Brexit

Carol Lynch, partner in Customs and International trade with the accountancy group BDO, said that only half of importers and exporters have signed up for the basic trading requirement. She said: "When we are looking at client reviews in terms of planning, the first question - particularly for vendors and suppliers - is have you got an EORI number. If you haven't, that's a very good indication that you haven't given any thought to future planning, deferred planning, tariffs, haulier preparations. The EORI is the very basic requirement.” For her, both imports and exports will be seriously affected by trade barriers. Lynch clarified: "Imports are especially important for consumers and manufacturers. Goods purchased from the UK and 80% of goods coming from Europe and outside of Europe come through the UK. It's critical and we'd be working with hauliers in making sure drivers are prepared and the right paper work has been handed in. Whatever chance you have of not being delayed is based on your preparations, that you know how to complete import declaration, that it's cleared and that you have that clearance slip in the cab so the driver knows what to do when they drive off the boat. There are a number of steps to ensure you can minimise the risk of delays which are, to a certain extent, inevitable.”

According to the Financial Times, France is already preparing for a no-deal Brexit by planning to trial an electronic customs system. The trial of the electronic customs system will commence in mid-September in Calais, ahead of a possible no-deal Brexit on 31 October. French minister in charge of customs Gérald Darmanin told French radio station RTL: “For a month, we’re going to pretend there is Brexit. For a lot of companies, we are going to have a sort of dress rehearsal so that we are ready at the end of October.”

If you are an importer or exporter, you must have experienced the general pessimism and uncertainty surrounding Brexit, while you might have been affected by the weak pound. If you want to protect your business and financial transfers, contact Universal Partners FX. UPFX will offer valuable support and assistance when transferring money internationally while tailoring hedging strategies to your business’ needs. Give them a call today and find out how much you can save on your international money transfers.

Buying property abroad can be hard but is especially harder when considering the current political impasse. After the prime minister, Boris Johnson, received the Queen’s approval to suspend parliament for five weeks from early September, in a move that has been criticised as “profoundly undemocratic” and “sinister,” Brexit continues to be one of the thorniest issues in the UK.

Brexit and expats

This is why, when thinking of moving abroad, British retirees might need to firstly research and understand the complexities of post-Brexit life outside the UK.

What would a long-term residency mean, or what would be the changes to pensions for Brits abroad. For example, it is unclear whether transfers to a Qualifying Recognised Overseas Pension Scheme will be tax-exempt post-Brexit. Additionally, for anyone considering buying property abroad, the biggest issue is currency volatility and its impact on international money transfers. Once you decide to buy your property and want to transfer funds to pay for your property, you don’t want to find that your hard-earned money was significantly affected by the movement of the pound due to Brexit developments.

What to consider when deciding to purchase a property

Researching and understanding local laws regarding buying a property should be one of your first steps. The process of buying a property abroad will be different from place to place, with specific laws and regulations for foreign residents buying property. If you would like to invest in a property abroad to let it afterwards, you should most likely follow the same steps, and research the laws about renting. You don't want to spend a large sum of money on a property that will be chained to a set of rules and limitations, something that will eventually hurt your funds. While you might be looking at European countries such as Spain and France, you might as well do your research regarding other countries where housing prices, the pound's exchange rates, and the local laws are most favourable to you.

Buy to let

Investing in a property abroad that you can also let is a way to increase your income, so deciding the right location and price, and understanding its potential and rental yield are important factors. If you are unsure, discussing this with mortgage brokers, financial planners and accountants might help you decide on whether this is a good investment.

When you deal with tenants, it will be good to have a mediator such as a property manager, who will help you find the right tenant and organise maintenance issues. As long as you are prepared to maintain a property abroad and make it attractive to tenants, then you would also be prepared to pay the costs regarding maintenance and renovation.

Buying a property

Once you have decided on a property, you need to make sure that all papers are in place and all processes are transparent. Get receipts and documents to prove your transactions or agreements and never leave anything to chance. You must always get the title deeds to the property or land, so you know that you own what you have paid for. Also, you need to be aware of any outstanding utility bills or local tax from the previous owner of the property.

If you require financial help to purchase your property, you can get a mortgage, but first do your research and find the right mortgage lender for you. You will need specific mortgage from a bank that supports your chosen country. As it is a competitive market, there are lots of options for you, so get the right solution to meet your own borrowing needs.

Transferring money

When you’re buying property, you’ll need to transfer money overseas. Universal Partners FX is a leading foreign exchange specialist that can assist you with your international currency transfers and save you significant amounts of money on large transfers. UPFX will provide an affordable way to transfer money overseas and protect your funds from foreign exchange risk. Get in touch today to find out how much they can save you on your international money transfers.

The UK and Korea have signed a continuity Free Trade Agreement (FTA) that will ensure that businesses can trade uninterrupted after Brexit.

As it stands, Brexit is at the centre of the UK’s political and financial struggles, with Brexiters putting more pressure on the government.

Farage: “Deliver of politically die”

During a speech at a Brexit party event, former Ukip leader Nigel Farage warned prime minister Boris Johnson that the Brexit party will fight the Conservatives in “every single seat up and down the country” if Johnson returns to Theresa May’s deal. The former UKIP leader highlighted that Johnson’s political career depended on him delivering a “clean break Brexit.” The prime minister had requested from the EU to re-open the withdrawal agreement that they reached with Theresa May in order to make changes, but he has been clear that the UK will be leaving on 31 October with or without a deal.

But beyond Farage’s threats and political braggadocio, Johnson cannot be driven by passion or instinct. Instead, now is the time to deliver politically conscious and responsible solutions that will irreparably affect the lives and livelihoods of British people in and outside of Britain.

As we increasingly move towards the possibility of a no-deal Brexit, opposition MPs have began thinking of how they can pass a law blocking a no-deal Brexit. Another solution to stop no deal is to bring down the government via a no-confidence vote. A No 10 source accused the MPs of "seeking to sabotage the UK's position.”

Trade deals that will guarantee continuity of trade post-Brexit

As the CBI warned, “trade continuity must prevail if business is to thrive.” It is essential for companies to continue trading "on pre-agreed terms, avoiding tariffs and other market access barriers." In order to avoid businesses' disruption and secure the smooth trading, the government would need to focus on securing more trade continuity agreements. With Brexit around the corner, the UK is pushing to agree on trade deals with its trading partners, signing so far 13 trade continuity agreements with 38 countries, including Norway and Chile. These trade continuity agreements cover countries accounting for £89 billion of trade, an increase from £39 billion in March 2019.

UK and Korea continuity free trade agreement

The UK and Korea continuity Free Trade Agreement which was signed on 22 August aims to help businesses continue trading freely after Brexit happens on Thursday 31 October. The Secretary of State for International Trade, Liz Truss and the Korean Minister of Trade, Yoo Myung-Hee signed the agreement, which marks the first post-Brexit deal in Asia. Trade between the two countries totalled £14.6 billion in 2018.In 2017, 6,900 British businesses exported goods to Korea, worth around £5.8 billion.

The agreement secures British jobs in such important sectors as manufacturing, technology and professional services. Secretary of State for International Trade Liz Truss MP said: “My priority is to make sure that British businesses are fully prepared for Brexit and ready to trade on Thursday 31 October. That’s why I’m delighted to sign this trade deal today with one of the biggest markets covered by existing EU trade agreements. It will allow businesses like Bentley and Denby to keep trading as they do today, and they will be able to take advantage of the opportunities that Brexit offers.”

Trade Minister Yoo said: the “signing of the FTA will remove much Brexit uncertainty out of our long, valuable economic partnership. In this challenging time, we took a proactive step, and as a result, our Free Trade Agreement today sends a signal to the world of our strong, collective support for free, open, rules-based trade. Building on today’s signing, I hope to see further deepening of our economic partnership, and Korea and the UK walking together on the path of prosperity and a brighter future.”

Businesses welcome the trade agreement

Businesses in automotive, technology, renewable energy, retail and ceramics were positive for the trade agreement as Korea is a significant trading partner. Exports to Korea include British cars, which in 2018 increased to £943 million. According to the government's press release, Bentley's classic luxury car saw a "thirty-fold increase in exports between 2006 and 2015, from 10 cars driving on Korean roads in 2006 to over 380 in 2015."

Exports of ceramic products from the UK to Korea were around £17 million in 2018, and the British ceramic company Denby sells its ceramics in over 40 department stores in Korea.

Brexit developments

While the UK-Korea agreement is welcome news to many businesses, it is hard to see what will happen post-Brexit. If you are an importer or exporter who regularly trades within and outside the European Union, you are most likely affected when transferring funds cross-border. Ideally, getting in touch with a leading foreign exchange broker such as Universal Partners FX will help you navigate the current volatility and safeguard your funds. Give UPFX a call today and find out how much they can save you on your international money transfers. 

Exchange rates are the price of a foreign currency that an amount of one currency can buy e.g. one-pound sterling. An increase in the value of the sterling means one pound can buy an increased amount of a foreign currency, meaning you are getting more for the same amount of money. Businesses that import and export goods need to pay close attention to these exchange rates as the value of goods are highly sensitive, chopping and changing with the constant fluctuations. Businesses that trade domestically must also be aware of changes in exchange rates as they will have an indirect impact by virtue of the wider economy. So, how exactly do exchange rates affect a business? Let's take a look at some examples.

 

Selling overseas

If you run a business that sells products or services to a country abroad, then a change in the exchange rate will have a direct impact on your bottom line. The force of the impact will be dependent on how invoices are issued. If invoices are submitted in the foreign currency, a risk remains where you will receive less money than expected if the exchange rate moves against you from the time the invoice as issued and date of payment. Issuing invoices in your local currency should have a lesser impact, as the overseas buyer must change their local currency into yours to make payment. You'll receive the full invoice amount regardless of where the exchange rate sits. The potential risk here is that your prices may become uncompetitive as a result of variations to the exchange rate, leading to lost market share against foreign competitors who do not have to include transactional exchange rate changes.

 

Buying overseas

As with selling overseas, if your business contracts with a supplier from a foreign country, you become vulnerable to fluctuations in the exchange rate. For example, if you purchase goods from a supplier in China and payment of 300,000 Chinese Yuan for your next shipment is due in a month's time with an exchange rate of 8.74, your invoice would sit at £34,330.83 if paid today. However, in a month's time when the payment is due if the exchange rate has moved to 8.8, your invoice would change to £34,090.90, meaning you're paying £239.93 less for the same shipment of goods. Of course, if the exchange rate was to go the other way, you would have to pay more for the same amount of goods.

 

Indirect impact

Changes in the exchange rate can also indirectly impact your business, even when you do not buy or sell goods and services overseas. For example, if you transport products around the country using delivery trucks and the cost of fuel is raised due to changes in the exchange rate, you will end up paying more for your shipments to be delivered. Exchange rate volatility can also have an effect on competition. Depreciation of your local currency makes the cost of importing goods more expensive, which could lead to a decreased volume of imports. Domestic companies should benefit from this as a result of increased sales, profits and jobs.

 

So, when it comes to exchange rates affecting businesses, this can happen in various ways. If your business is in need of professional and expert advice for dealing with exchange rates, then please do not hesitate to contact one of our foreign exchange experts today or visit our business foreign exchange page to learn more about how we can help you.

Business Foreign Exchange >

Buying a property abroad can be difficult especially with the likelihood of a no-deal Brexit. But considering the advantages and disadvantages, and doing your own research wisely, you will be able to buy a property without throwing your life savings away. It will be good to discuss your property purchase with a currency specialist who will help you understand the market and offer assistance when making large or regular international transfers. This will be significant particularly due to the current political chaos in the UK. On Wednesday, Merkel gave the prime minister an ultimatum to find a solution with regards to the Irish backstop, as the pound slipped to low levels, close to the ones seen back in January 2007.

Brexit

In his meeting with Merkel, Johnson accepted the German Chancellor’s "blistering timetable" admitting that it was the UK’s burden to find a solution to the political deadlock. In his familiar humorous style, Johnson repeated Merkel's campaign slogan "Wir schaffen das," or "we can do it," causing laughter among the Chancellor and reporters.

In a Bloomberg article, it was reported that after Boris Johnson’s letter to EU officials, the French government now expects the U.K. to leave the EU without a deal, something that would immediately install border controls at the end of October.

The article notes that with Johnson becoming prime minister, EU officials believe that a no-deal Brexit would be the most likely outcome, as the UK “doesn’t have a realistic plan for an alternative to the backstop. The measure is despised by ardent Brexiteers in Johnson’s Conservative Party because it keeps the U.K. tied to many of the EU’s customs and trading rules, and Parliament has rejected the Brexit deal three times.”

Buying your dream or retirement home

Despite the political deadlock in the UK, if you have made your research and you are certain about moving abroad and purchasing your dream home, then there’s a few things you need to have in mind.

First, you should research the area of your desired property and find out the benefits of living in that neighbourhood. Are there any amenities nearby, is there access to the beach or the motorway, and generally, what is the atmosphere and feeling of the area and community? You will have to live there and, perhaps, in the future, sell the property with significant returns. So, trying to get the best deal for the best location will definitely enhance your investment in the future.

Make sure that you are not buying something you have never seen in person before. In the case that a developing company will take care of the construction of the building, but you have only saw the plans, do your research beforehand and find out whether the developers are reliable. Having a contract that guarantees that by the end of the project you will get what you were promised is the most secure way to safeguard your interests. Not only foreigners, but locals have fallen in the trap of buying a property but not the land is on, resulting in court cases and lots of stress.

Talk to the experts

From currency exchange brokers, to mortgage brokers and lawyers you will need specialist help when deciding to relocate and purchase a property abroad. In this sense, you will need to factor in costs for legal advice, taxes, notary fees, utilities, such as electricity, water, and gas connections.

Buying a property in France or Italy, 10%-12% of the property’s purchase price would go to cover government taxes and legal fees, while in Spain can go up to 12%-16%.

If you are buying property abroad, it is very important to go to a specialist such as Universal Partners FX. With the current volatility and weak pound, it is best that you contact a currency specialist as soon as you start the buying process, so that you get the best exchange rates possible and pay the minimum amount of fees. UPFX conduct in-depth market analysis, use state of the art technology and can offer access to the best exchange rates available. Get in touch with them today to find out how much you can save on your currency transfers.

On Monday, Tony Lloyd, the shadow Northern Ireland secretary, said that Boris Johnson was pursuing a Brexit that was either “disastrous” or a “fantasyland wishlist.”

Lloyd was responding to a letter that the prime minister had written to the EU about reopening the Irish backstop issue and suggesting its replacement by some form of commitment that would guarantee the prevention of a hard border between the UK and Ireland. Johnson’s new position contradicts his previous support of Theresa May’s deal. As Tony Lloyd said: “Boris Johnson seems to have forgotten that he voted for Theresa May’s deal including the backstop. Whichever Brexit outcome he pursues, whether it’s a disastrous no-deal or this fantasyland wishlist, Boris Johnson clearly has no qualms about putting jobs, rights, prosperity or peace in Northern Ireland at risk.”

While Johnson believed that the EU will be receptive to his proposal, on Tuesday Donald Tusk rejected his request. As a response, a Downing Street spokesman said: “that unless the withdrawal agreement is reopened and the backstop abolished there is no prospect of a deal. It has already been rejected three times by MPs and is simply unviable as a solution, as the PM’s letter makes clear.”

Johnson has stated on more than one occasions that he is willing to crash out of the EU without a deal on 31 October, despite warnings that the UK will face food and medicine shortages.

The letter

Johnson’s letter is an attempt at negotiating with the EU which appears as a regressive move, bringing up again the controversy around a hard border with Ireland that the EU and many in the UK and Ireland are clearly against. Before meeting European leaders, Johnson addressed the four-page letter to the President of the European Commission Donald Tusk saying that the backstop is “anti-democratic and inconsistent with the sovereignty of the UK.” He added that there could be different customs arrangements at the Irish border within the two-year transitional period after Brexit. However, having some general commitments in place that would prevent a hard border until the proposed system was agreed, was also a solution, Johnson noted.

But the EU does not wish to renegotiate the withdrawal agreement and the backstop. According to Guardian sources: “There was a two and a half year negotiating process in which the EU compromised, including on the question of the backstop. The withdrawal agreement is not open for renegotiation and the backstop is not open for change. A legally operable backstop to avoid a hard border remains central to the withdrawal agreement for the EU27.”

Johnson said: “I propose that the backstop should be replaced with a commitment to put in place such arrangements as far as possible before the end of the transition period, as part of the future relationship. I also recognise that there will need to be a degree of confidence about what would happen if these arrangements were not all fully in place at the end of that period. We are ready to look constructively and flexibly at what commitments might help, consistent of course with the principles set out in this letter.”

In the letter, he claims that the backstop is anti-democratic because it could force “the UK potentially indefinitely into an international treaty which will bind us into a customs union and which applies large areas of single market legislation in Northern Ireland”.

But an EU source described the letter as “a total moving of the goalposts on an issue of great importance and sensitivity that affects the lives of people on the island of Ireland.”

What happens next?

Johnson has also been accused by Tory MPs who have written a letter saying that the prime minister is preparing for a no-deal Brexit as his demand for the abolition of the backstop is simply impossible.

According to No 10, the prime minister has been clear: “there cannot be any actual negotiations unless the backstop goes; that’s the message he has delivered to leaders in his phone conversations and he will do that face to face. We have been clear that what the EU needs to understand is unless the withdrawal agreement can be reopened and the backstop abolished, there isn’t any prospect of a deal.”

Johnson will be meeting Merkel in Germany on Wednesday and on Thursday Macron, but the eyes of EU leaders will be on the UK, Tory MPs and opposition leaders as they attempt to block a no-deal Brexit on 31 October.

Are you importing or exporting?

If you are an importer or exporter who transfers money internationally, you are aware of the unpredictable movements of the pound due to Brexit and ongoing political developments. Universal Partners FX can offer valuable assistance, in-depth knowledge of the markets and tailor hedging strategies to help you make the most of your money. Give them a call today and find how much you can save on your international money transfers.