British businesses conducting international trade and transferring their funds cross border regularly are increasingly worried about Brexit and the UK’s future relationship with the EU. Boris Johnson has been warned that the current trade talks are failing and that he needs to press the European commission president, Ursula von der Leyen, and EU governments to focus their attention on the negotiations in order to reach an agreement with the British government.

The prime minister has returned to Downing Street on Monday, and he needs to act fast in order to rescue the negotiations before 31 December when the UK will leave the single market and customs union. Both the British government and the EU have agreed that they need to see progress by June, while the UK government has said that there is a possibility to leave the EU without a deal.

The two sides will be meeting again on 30 April. The UK’s chief negotiator David Frost has rejected an extension of the transition period as the government is confident that it can agree on a free-trade deal.

The prospect of no-deal Brexit

However, the prospect of leaving the EU without a deal has become even more real as there are only two rounds of video-conference talks left, while senior figures from both sides agree that delivering a deal is now highly unlikely. An EU official has also noted the added problems of having to communicate online: “You don’t see all the faces of the people around the table; you don’t see the body language, you cannot have discussion in the margins. But having said that, this is how we are working now; we need to make the best of it.”

Last week’s talks have not been progressing successfully either, as there was disagreement between the EU’s chief negotiator, Michel Barnier, and his British counterpart, David Frost. Barnier pointed out that UK officials failed to engage and instead “listened politely” to the EU’s proposals. As he said: “I regret it, and this worries me.” According to the UK, despite their commitments to maintain high standards, the EU rejected proposals regarding the removal of certain trade barriers. Additionally, the UK disagrees with the central role that the European court of justice will play in dispute settlements.

In regards to the issue of Northern Ireland, there are concerns whether the UK will implement the Northern Ireland protocol  in the withdrawal agreement in order to avoid a hard border in Ireland and maintain checks on goods travelling from Britain to Northern Ireland. An EU official said: “You need to have customs checks on goods arriving in Northern Ireland, veterinary controls, a VAT system needs to be put in place.”

UK government not seeking an extension

The UK government has warned EU leaders that they need to change their position if there is going to be a post-Brexit trade deal. The PM believes that there will not be an agreement unless the EU recognises the UK as “an independent state.”

Michael Gove, Cabinet Office minister, has also told MPs that the government will not seek an extension to the transition period, which ends on December 31. He said that extending the period will only force Britain to make a financial contribution to the EU budget which “could be spent on our NHS.” He added that the EU has failed to recognise the UK’s unique status and instead has treated Britain “like the Ukraine,” as if it were a country seeking closer relations with the bloc.

 

If you are a business transferring funds across Europe and are worried about your payments, protecting your funds due to unexpected currency movements and securing the best exchange rates, get in touch with Universal Partners FX. UPFX’s currency specialists will help you navigate the market and can secure the most competitive exchange rates. Give them a call today or get a free quote.

Sterling was under pressure after Friday’s British retail sales figures showed that sales fell in March, despite an increase in consumer goods, particularly alcohol.

This was the biggest fall since 1996 when the Office for National Statistics (ONS) began recording the figures. As Rhian Murphy, ONS head of retail sales said, “Retail sales saw their biggest monthly fall since records began over 30 years ago with large declines in clothing and fuel, only partially offset by strong food sales. The “retail armageddon” as was described by Ayush Ansal, chief investment officer at hedge fund Crimson Black Capital, was a reflection of the Covid-19 pandemic.

The pound has been sensitive to gloomy economic figures but also coronavirus updates, as the foreign exchange market is watching to see how the country deals with the lockdown and how fast it recovers.

UK retail sales: Economists predict further fall in April

Thomas Pugh of Capital Economics noted that the record fall in UK retail sales last month demonstrates that consumption has fallen during the lockdown:

“At one end, there were clear signs the pandemic was keeping consumers away from the high street, non-food sales excluding petrol and online sales were down by 19.4% m/m, with an especially sharp 34.8% m/m fall in clothing sales. And petrol sales declined by 18.9% m/m. Department store sales did rise by 2.8% m/m, but appears to be due to purchases of food and other items online. On the other hand, food & drink sales were up 10.4% m/m (within that alcohol 31.4%!) and online sales (non-department store) rose by 5.9% m/m, as consumers were locked down at home.”

But the fall in March is only the beginning, as economists believe that April will post a bigger fall. Alan Custis, head of UK equities at Lazard Asset Management, says that “the real story will be seen in April’s figures when the lock-down will be fully felt by retailers. Here we expect to see dire numbers, but it must be balanced up by very strong online sales, which we expect will be showing growth in excess of 50% year on year. There have been clear winners and losers and we think this will only become more apparent the longer the crisis continues.”

Consumer confidence at its lowest

Further disappointing stats did nothing to support the pound. On Friday, data from the research company GfK showed that British consumer confidence was at its lowest in April.

The balance of consumers who were considering making major purchases dropped to minus 52 in April, while, the net balance of those expecting their financial situation to improve dropped to minus 14. Howard Archer, chief economic adviser at the consultancy EY Item Club said: “The near-term fundamentals for consumer spending have clearly taken a very substantial downturn as a result of coronavirus. Many people have already lost their jobs, despite the supportive government measures while others will be worried that they may still end up losing their job once the furlough scheme ends.”

Transferring funds?

With the pound struggling due to weak economic data, it is logical that you might be concerned about your personal finances, volatile exchange rates and high fees when transferring your funds. Universal Partners FX can help boost your currency purchasing power by providing in-depth market insight, competitive rates and unparalleled customer service. You can find out more by getting in touch with their dedicated currency specialists or you can request a free quote.

A weakening global investor sentiment and a collapse in oil prices has hurt the pound, but the British currency gained slightly on Wednesday despite news that UK inflation fell in March.

Oil

Brent crude oil lost a further 10% in value and WTI crude 5% on Wednesday. The slump in global oil prices demonstrates the massive drop in activity which hasn’t yet been priced by markets. Later on Wednesday, there was a jump in the price of oil, partly the result of a tweet in which President Donald Trump said  that he had “instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.”

Inflation

After the government’s Covid-19 lockdown measures which hit demand for some goods, inflation figures on Wednesday painted a negative image of things to come, as the Office for National Statistics (ONS) reported a 0.2% drop. While this was expected, as consumers spent less on clothing and fuel due to the lockdown, there are concerns that there will be further drops if restrictions continue. The pound could fall further if dire economic data continues, the oil market is further weakened, and investors’ mood drops.

According to the ONS, consumer prices rose by 1.5% per year last month, down from 1.7% in February, which was the lowest since December, as cheaper clothing and fuel pushed inflation down. The ONS explained: “Falls in the price of motor fuels and clothing resulted in the largest downward contributions to the change in the CPIH 12-month inflation rate between February and March 2020. Rises in air fares produced the largest, partially offsetting, upward contribution to change.”

The ONS believes that people avoided shops or stockpiled essential items due to the coronavirus. While the lockdown was officially introduced on 23 March and prices were collected around 17 March, social distancing seems to have shaped consumer behaviours and retailers’ expectations, with less browsing in shops and more time spent indoors.

The inflation report also showed that due to the virus pandemic and failure of the Organization of the Petroleum Exporting Countries (OPEC+) to agree to cut supply in early March 2020, petrol prices fell by 5.1 pence per litre between February and March 2020.

What did economists say?

The drop in inflation in March is just the beginning and demand will continue to wane. Equals Group chief economist Jeremy Thomson-Cook said: “UK inflation stayed steady at 1.5% in March but the wider picture around prices shows that we will not be talking about high inflation for some time. A recession like the UK is currently enduring – we will wait on the data to confirm – naturally will see lower inflation through the destruction of a demand side to the economy whilst movements in oil markets of late show just what can happen to prices when demand dries up. You cannot have inflation without demand and if we are correct that demand rebounds slower than it fell – a Nike tick-shaped rebound – then the impulse into inflation should be low although a weak pound does remain a risk.”

Laura Suter, personal finance analyst at investment platform AJ Bell, says that the drop in oil prices and the change in shoppers’ attitudes will affect inflation: “Even before the recent capitulation, the price of oil was on the slide in March and this dragged inflation down slightly from February’s 1.7% to 1.5%. Oil prices have a massive impact on the UK’s inflation rate and with prices at the pump and home energy costs getting cheaper we’d expect this trend to continue for the next couple of months….What’s more, with retailers having to shut their doors we’re seeing more and more offer discounts to shoppers to move their buying online.”

UPFX

Naturally, the coronavirus has disrupted both individual and businesses’ financial plans. If you are concerned about your foreign exchange transfers and the impact on the pound as we navigate these difficult times, get in touch with Universal Partners FX and their currency specialists. Their in-depth knowledge of markets and expertise in transferring your hard-earned money fast and securely can give you peace of mind and protect your finances from unpredictable rate fluctuations. Get in touch with them today and find out how much you can save when transferring your funds abroad.

 

With the coronavirus continuing to affect the UK economy and the issue of securing a Brexit trade deal persisting, the British Pound is forecast to struggle, with investors’ growing increasingly anxious.

While worries about the coronavirus pandemic overshadowed Brexit temporarily, political concerns return as the government has highlighted its reluctance for a Brexit extension.

Brexit: No extension

With the transition period due to end on 31 December and with only three rounds of trade talks remaining, the UK would need to negotiate a trade deal by December 2020, especially when the government says that an extension would only "prolong the delay and uncertainty" around Brexit.

David Frost, the UK's chief negotiator and Michel Barnier, the European Commission's chief negotiator, after their Wednesday meeting via video conference, agreed on three weeks of talks beginning on 20 April, 11 May and 1 June. In a joint statement, they recognised that their work has helped to "identify all major areas of divergence and convergence", but further negotiations were needed "to make real, tangible progress in the negotiations by June."

But the UK government has clarified that no extension would be asked from the EU, despite recent calls by International Monetary Fund Managing Director Kristalina Georgieva to extend the period for negotiations and not "add to uncertainty" as a result of the coronavirus.

However, the prime minister's official spokesman said: “We will not ask to extend the transition period, and if the EU asks we will say 'no.' Extending the transition would simply prolong the negotiations, prolong business uncertainty and delay the moment of control of our borders. It would also keep us bound by EU legislation at a point when we need legislative and economic flexibility to manage the U.K. response to the coronavirus pandemic.”

David Frost has also similarly clarified the government’s intentions: “Extending would simply prolong negotiations, create even more uncertainty, leave us liable to pay more to the EU in future, and keep us bound by evolving EU laws at a time when we need to control our own affairs. In short, it is not in the UK's interest to extend."

The Prime Minister’s confidence in striking a satisfactory trade deal by the end of the year has been criticised by the opposition, with Liberal Democrat Sir Ed Davey saying that the refusal to extend the transition was "deeply irresponsible."

Concerns have also been voiced by the financial world. Economists and strategists have warned about the risks for the pound and have noted that uncertainty typically has driven investors to sell the pound against every other currency. Analyst at Thomson Reuters Richard Pace noted: “GBP dealers should fear July 1, when it will be too late to extend the Brexit transition past Dec. 31, 2020, and GBP would rightly suffer. The UK government has been vehement about not asking for an extension, and the UK parliament won't be able to force one this time, since Prime Minister Boris Johnson's huge Conservative majority will back his decision."

“Tough Times” for UK economy

It is not only the current uncertainty with Brexit, but also the coronavirus’ effects that will deeply hurt the pound and the economy. Chancellor Rishi Sunak has said that the coronavirus will have "serious implications" for the UK economy, as the Office for Budget Responsibility (OBR) is expecting that the virus will shrink the economy by 35% by June. Sunak said that the government needed to be honest and that the OBR’s figures suggest that the UK is facing “tough times, and there will be more to come.”

While the government is "not just going to stand by" and will try to protect “millions of jobs, businesses, self-employed people, charities, and households," the effects of the lockdown cannot be minimised.

Robert Chote, the chairman of the OBR, said that a three-month lockdown followed by another three months of partial restrictions would see the economy declining sharply, a drop that would be the biggest "in living memory."

The International Monetary Fund has also warned that the virus would cause the UK economy to shrink by 6.5% in 2020, and the global economy to contract by 3%.

If you are concerned about the status of your finances in these difficult times and are considering transferring your funds abroad, get in touch with Universal Partners FX. UPFX’s expert foreign exchange specialists will help maximise your purchasing power by offering competitive exchange rates and in-depth knowledge of the markets. Find out how much they can save you, by getting a free quote today.

Buying property overseas can be a stressful experience especially after the spread of the coronavirus and European countries’ lockdowns. However, you might not need to postpone your dream of buying a house abroad, as agents, notaries and lawyers have found new ways to respond to the situation.

Viewing a property

While you cannot be present materially to view your dream home, as countries such as Spain and France are on a state of emergency, many agencies continue to serve their clients through virtual tours and other online materials as an article in the Financial Times has pointed out. French agency Leggett Immobilier  state on their website that are open for business but can’t offer property visits. What they do offer, though, for the moment, is “a mix of videos, virtual tours, floor plans and additional photos.” They say that their agents are available to speak with clients through the telephone or video conference, and vendors willing “to do facetime or skype visits with you online.”

Proof of ID

While many viewings might have been postponed due to travel bans, agents and notaries are completing most paperwork online with the use of digital signatures, scanning and emailing documents or customers giving power of attorney (POA) to their lawyers. As the French agency says, their clients can give a “power of attorney” so they “don’t need to be physically present at either exchange or completion” when they purchase a property. While individual notaries might “have different interpretations of what is currently acceptable,” they note that clients’ agents will be able to clarify the current status of any purchase they have made.

According to Leggett, purchases continue with notaries accepting proof of ID by e-sign software such as web portals DocuSign and Yousign, without needing certification by a notary in the UK. The use of video conference and video links can also be used so that the notary can see the clients in real time signing the documents.

It is believed that the use of electronic signature in signing contracts remotely will continue and become more widespread over the coming weeks, especially when clients have already viewed the property and have already agreed on a price prior to the lockdown.

Flexible Dates

If you have already found your home and are in the middle of completing the purchase, then using a flexible completion date can ensure that the sale still progresses smoothly for both parties. Solicitor at My Lawyer in Spain Alex Radford says that they are suggesting a future completion date of at least two months which should be included when signing the documents. “There needs to be a clause inserted that states ‘completion will be by ‘x’ date or earlier by agreement or later if the parties or their legal representatives cannot attend completion due to Covid-19 crisis,’” he says. Radford clarifies that only documents of an urgent nature are signed, while other legal work is postponed, according to the notary’s criteria.

Agreeing on a flexible date is important, as this will guarantee securing your funds and progressing with the purchase. The FT article notes that having a “‘safety-net’ clause that allows buyers to pull out if they cannot secure a mortgage,” or extending target days will protect buyers as well as sellers who fear that their property might be devalued after the coronavirus.

If you are in the process of buying your dream home, there is no reason to panic. Jacqui Reddin, Head of Sales Development at Beaux Villages, says that staying in touch with your agent and remaining informed is the best way to move forward. She clarifies that they “are still actively dealing with ongoing sales and even have new ones since lockdown. The buying process is bound to take a bit longer, but if we all stay connected things will start to flow more smoothly.”

In regards to financial concerns over transferring your money abroad or currency exchange, keeping in touch with your currency specialist such as Universal Partners FX can give you peace of mind and help you navigate the unexpected volatility of currency markets. If you want to schedule ahead and safeguard your funds, talk to one of their foreign exchange experts today.

Sterling has risen against both the euro and the dollar benefitting from a drop in the euro and market risk.

Despite news of Prime Minister Boris Johnson’s being admitted to hospital for coronavirus symptoms, which initially hurt the pound, the British currency is now on the increase as the PM is recovering but also as risk appetite is on the surge.

The increase in risk appetite results from the slowing of the spread of the coronavirus in European countries, something that has impacted on the greenback which on Tuesday fell, while riskier currencies rose.

Boris Johnson’s Recovery

Yesterday, Chancellor Rishi Sunak had said that after two nights in intensive care, Prime Minister Boris Johnson was "improving" and "engaging positively" with medical staff at St Thomas' Hospital in London. The PM was taken to St Thomas' Hospital on Sunday after he tested positive for the virus and was moved to intensive care on Monday.

In the meantime, Sunak will be holding a Cobra meeting on Thursday to review the government’s approach to lockdown measures. Due to the coronavirus lockdown restrictions, the meeting will be held online via a conference call and will be attended by ministers and other top government officials.

Cobra stands for Cabinet Office Briefing Rooms and is usually held during national emergencies. In the past, Cobra meetings were held after 9/11 and 7/7 terror attacks, Lee Rigby's murder, 2001's foot and mouth outbreak and 2018’s Novichok attacks in Salisbury.

Today’s review will look at the need for restrictions, which were announced by Mr Johnson on 23 March. According to Sunak, “the review would happen ‘around’ the three-weeks point, which would be based on evidence that will ‘only be available next week’.” He added: "I think rather than speculate about the future, I think we should focus very seriously on the here and now and the present.”

Weak Euro

Sterling’s rise comes as a result of a weak euro after the Eurozone’s failure to agree on a common approach to the economic impact of the coronavirus. It is understood that a joined fiscal response will effectively stop the collapse of the Eurozone’s economy. This is why, many European nations such as France and Italy have requested a “coronabond” in order to secure funding to help those European countries whose economies have been hit the hardest by the coronavirus epidemic.

 The disagreement among European nations is intricately connected to the idea that a coronabond would mean managing the risk of all Eurozone states and would demand richer states such as Germany, Netherlands and Austria to fund it, an idea that they highly oppose to. It is this lack of agreement on how to support member states affected by the virus that is currently testing the strength of the euro.

As Pound Sterling Live reported, “The ability of global governments and monetary authorities to provide fiscal and monetary assistance to their respective economies at this time will ultimately limit the damage inflicted by the virus outbreak, as well as determine how quickly they recover. For markets, this will become a key differentiator between various currencies, with those underpinned by credible policy initiatives likely to outperform.”

Emergency Funding

To combat the effects of the coronavirus pandemic, today (9 April), the Bank of England has agreed to temporarily lend billions of pounds from its emergency overdraft to support businesses and workers.

The so-called “ways and means facility” will enable the government to access a large amount of funds in a short period of time to support the economy and pay for its stimulus programme, while minimising financial distraction.

In a joint statement, the Treasury and Bank said: "The government will continue to use the markets as its primary source of financing, and its response to Covid-19 will be fully funded by additional borrowing through normal debt management operations."

If you are concerned about your personal finances or your business is transferring large funds across Europe and the world, contact expert currency brokers Universal Partners FX. Their foreign exchange specialists will offer assistance when transferring your hard-earned money overseas and protect your funds from current market volatility.

Our Directors - Oliver Carson & Dhaval Patel - address the company performance and annual accounts, the team and company culture, our relationships with clients, and giving something back at a difficult time.

 

Company performance

With our financial year just ending there is much to be proud of. All involved with Universal Partners FX have worked phenomenally hard to achieve fantastic financial results for the past 12 months.

Since March 2018, our revenue has grown by over 500% - and profits by 200%. The magnitude of these results is enormous and the achievement of generating revenue of £2.8 million and just over £2 million in gross profit at this stage of our growth cycle cannot be overstated.

We are delighted to announce that we have grown our client base by an astounding 55% at a time when significant reinvestment has gone into expanding the team, improving systems and creating new departments. This is a great reflection of the hard work put in by each and every member of staff.

You can find the full report here.

 

The team and our unbeatable culture

These results highlight the hard work from our amazing team, who are striving to be better each and every day.  From the beginning we have made it a priority to create a culture of hard-work, trust and honesty. By investing heavily in our employees and putting them at the heart of everything we do, we know that this helps create a culture that breeds success. Ultimately, all of this is done so that our clients will reap the benefits and our fantastic reviews show we are delivering on that.  Our long term goal is to be the biggest foreign exchange company in the UK, so we know that the bottom line is providing value to our clients, and we will never lose sight of that.

 

Thank you to our clients

In the end, nothing is possible without the unwavering trust of those who use our services. In the past 6 months we have welcomed record numbers of new clients and we'd like to take this opportunity to thank all of you for being part of our fantastic rise in the foreign exchange industry.

We are very proud to work with some incredible firms in some exciting industries. The financial results we achieved came down to large volumes being traded though us, so working with large multinationals and companies that are listed on the stock exchange provides us with the best opportunity to showcase the value we can bring.

Providing value to our clients and in some cases hearing the stories behind your FX is what we get up in the morning for. We look forward to much more of this in the future.

 

The road ahead

It is difficult to start making projections at this moment in time, but growth is definitely on our agenda for the year ahead. We want to continue to add top quality people to our team and anticipate that our dealing floor will expand by 50% in the coming year. This growth will be backed up by doubling the back office team, which we are investing in to support future growth of core divisions. It is truly an exciting time for the company and every one has a part to play.

 

Giving something back during these difficult times

Given the extreme circumstances at the moment, we appreciate that for many there is massive uncertainty. This includes businesses, but also individuals who are unwell or worried for the safety of loved ones. In these difficult times it is important that we stick together because collectively we can beat this.

With that in mind, we have guaranteed that all our staff will keep their job and measures have been taken to protect salaries.

To extend our help outside the company, we have also pledged care packages to an NHS hospital local to us, giving essential supplies to the great NHS staff who are battling day in day out to help treat people.

A small gesture, but hoping it offers some respite to those in greater need. More information on this will follow.

Once this is all behind us, we hope that Universal Partners FX continues to grow, but also that businesses, individuals and the nation as a whole can bounce back and enjoy success in the coming years.

Keep safe everyone.

 

Oliver Carson & Dhaval Patel

Universal Partners FX Directors