The pound appears to have risen ahead of the weekend, as Brexit negotiations continue. EU ambassadors have been told that a trade and security agreement with Britain is almost ready to be finalised as gaps on the contentious issues are “slowly shrinking.”

Both sides however remain inflexible, with European politicians saying that there remains work to be done and the UK saying that the EU needs to compromise. The risk of a no-deal Brexit in six weeks is still high.

According to a Bloomberg article, the UK “hasn’t moved sufficiently to overcome the main obstacles to a post-Brexit trade deal as three of the bloc’s leaders called for contingency plans to be stepped up in case there is no agreement.” Secretary General of the Commission Ilze Juhansone told envoys from the EU’s 27 member states on Friday that “negotiations could now slip into December as progress has been slow.”

On the other hand, the report noted that "The U.K. government has said that both sides have already made concessions on the three remaining areas of disagreement - access to British fishing waters, the level playing field for business, and how any deal is enforced - but that it’s up to the EU to make the final compromises."

A report on Reuters, stated that EU diplomats reported that “The European Union and Britain remain at odds in last-ditch trade talks over fishing rights, guarantees of fair competition and ways to solve future disputes, even though they are very close to agreement on other issues.” A senior EU diplomat told Reuters that “We are both close and far away. It seems that we are very close to agreement on most issues but differences on the three contentious issues persist.” Officials will continue negotiations online, as on Thursday it was announced that direct talks were suspended after a member of the EU team tested positive for COVID-19.

Negotiations are stuck

Negotiations have not progressed much as both sides remain unyielding on the main points: “Some things on the level playing field have moved, albeit very, very slowly. Fisheries are not really moving anywhere right now.” In terms of state aid, Britain has offered to set up a regulator for corporate subsidies, as the EU requested, but this was rejected as the body needed to be independent from the government and with a clear authority. Another EU official said that “negotiators mostly focused on such elements of corporate fair play as well as divvying up fishing quotas in recent days: ‘Both of these are still very stuck.’”

Pound Rises despite Brexit deadlock

The pound has risen against the Euro, Dollar and other major currencies, as negotiations continue. Markets remain confident that both sides will strike a deal despite the persistence of major differences. In the possibility of a trade agreement being reached the next two to three weeks, the EUR is expected to fall, something that will also be supported by positive news about a vaccine for Covid-19.

Are you Transferring Funds Abroad?

With the ongoing Brexit negotiations and unexpected volatility, contacting a currency specialist could save you time and money. If you are sending your family members money, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your personal transfer needs.

 

A weak US dollar and rising hopes for a trade deal between the European Union and Britain helped Sterling rise on Tuesday afternoon.

Analysts are now saying that the pound could rise further in the event of a post-Brexit trade deal. This, of course, is something we have seen every time that there was any positive news pointing to a breakthrough to the negotiations. Sterling fell immediately after the UK referendum vote to leave the EU in June 2016, as political uncertainty hurt the pound. Since then, Sterling has been volatile every time news was released regarding Brexit and has fallen on news of a stalemate in the negotiations or disappointing updates from both sides. As we are nearing the end of the Brexit transition period, and the possibility of an agreement appears more certain, the pound will most possibly react positively and rise.

A possible agreement by mid-November will support the pound

Optimism regarding the trade talks has risen recently after the EU’s negotiating team and Michel Barnier the EU’s chief Brexit negotiator said that they will resume talks in London until Wednesday 28 October and many reports have noted that an agreement could be reached by Saturday, 31st October 31.

Any time from now until the middle of November, when a possible deal might be reached, Sterling could strengthen as long as the two sides ensure that a no deal scenario is not in the cards.

By reaching an agreement, both sides will provide certainty to businesses and investors, eliminating uncertainty, restoring sentiment and offering relief to the pound.

USD weakness to support the pound

For many analysts, the pound might rise, but this might not be a sharp rise and it will only be the result of a depreciation of the USD. At the same time, they predict that a strategic buying of Sterling in anticipation of a deal being reached might be possible, but this will be short-term.

According to Pound Sterling Live, Rabobank see potential for the GBP/EUR exchange rate to rise if a Brexit deal is announced, but such a rise will be limited.  Jane Foley, Senior FX Strategist at Rabobank said: "We don’t expect that relief at the end of the Brexit process will be sufficient to divert attention away from a poor set of UK fundamentals," she adds.

"If we are wrong on the market’s assigned relative probabilities, then Sterling will move more or less than we expect. Given the better mood music of recent weeks, risks appear skewed in favour of a smaller move,” Paul Robson, Head of G10 FX Strategy EMEA at Natwest Markets said. But they also highlighted the issues lying ahead, including that of companies having to adjust to the new realities after Brexit and the potential disruptions in various sectors, including the auto industry that were recently highlighted by the automobile sector.

Potential threats ahead

Economists are emphasising the fact that Brexit will not only disrupt various industries and create uncertainty about the future of businesses, but it will add to the UK’s existing problems. The economy is currently hit by Covid-19, government finances are deteriorating, and lockdown restrictions are hurting the economy further. With a weak economy and limited investment flows, the pound might have a rocky road ahead, with or without a Brexit trade deal.

Are you Transferring funds abroad?

With the British currency remaining sensitive to Brexit uncertainty, you should get professional assistance when transferring funds abroad. Whether you are importing or exporting goods, paying employees overseas, or managing regular payments abroad, you need to be prepared and protect your business or your family finances from market volatility. Get in touch with Universal Partners FX to find out about efficient risk management and tailored solutions to your business’ transfer needs.

European automobile manufacturers have called on the EU to take a softer stance regarding the UK’s future market access, and they warned that the bloc’s harsh position could have long-term effects on the automobile industry. In June, more than 50 European and British food and drink trade associations wrote to Brussels to request for more flexibility, underlying the fact that a tariff-free trade agreement needed to be coupled with the assurance that businesses will be able to benefit from it.

Why does the manufacturing sector worry?

For UK and EU importers and exporters, it is important to maintain a frictionless access to the single market. Manufacturing businesses are aware of the damaging effects of Brexit and the ensuing disruptions to their sector. Brexit-related uncertainty has made it very difficult for most sectors to prepare for a post-Brexit business environment and reduced the possibility of securing investment.

UK manufacturing is integrated into the EU single market, as almost half of all UK goods imports and exports are with the EU. Many UK manufacturers are dependent on frictionless trade with the EU so their supply chains are not interrupted. With the possibility of a no deal Brexit, manufacturing sectors are concerned about a potential lack of regulatory alignment with the EU as no business wants to lose the privilege of free trade.  According to independent research from the UK in a Changing Europe initiative, some sectors, such as automotive, could be severely affected if they have to pay tariffs to export cars to the EU in the absence of any agreement with the EU. As they warned, “In almost all cases, Brexit will create additional financial or other cost burdens for companies: tariffs, customs declarations, certification costs, audits to ensure rules of origin compliance, loss of collaboration opportunities in R&D, border delays, EU customers switching to other suppliers, visa costs for EU workers, and so on.”

Letter from the European Automobile Manufacturers’ Association (ACEA)

In a letter from the European Automobile Manufacturers’ Association (ACEA) last week, the association which represents  some of the biggest car manufacturers in the world, including BMW, Toyota and Fiat, warned Brussels that some aspects of the bloc's current stance are "not in the long-term interests of the EU automotive industry.” The ACEA urged the EU to "reconsider its position" on tariff-free trade. In its letter, sent last Thursday, 15th October, the ACEA requested from the EU to reduce the percentage of car components manufactured in Europe or Britain so that the businesses can benefit from any EU-UK trade deal. The car manufacturers are urging that the new rules be introduced slowly so that the automobile industry has the time to prepare and adjust for the new rules and environment. For EU manufacturers, an agreement that provides tariff-free, quota-free trade on all goods is crucial.

EU chief negotiator Michel Barnier has told businesses that “short-term adaptation costs” were necessary to protect “long-term economic interests.”

Nicolas Peter, BMW’s finance director, has said in a press conference last week: "The European Automobile Manufacturers Association (ACEA) has estimated that it could cost car manufacturers and suppliers from 10 to 11 billion euros, so we need tariff-free trade. And even then, it must be seamless. We have a just-in-time production system, so customs administrative processing must be efficient."

Are you a Business Transferring Funds Abroad?

If you are an exporter or importer and worried about your international trade costs, and the volatility of the British pound, you should get professional assistance when transferring funds abroad. Get in touch with Universal Partners FX to find out about efficient risk management and tailored solutions to your business’s transfer needs.

Pound volatility is expected to be high today and on Monday as the markets await Prime Minister Boris Johnson’s decision on whether the UK stays or leaves the Brexit negotiating table.

In the meantime, England is dealing with the rise of new Covid-19 cases and restrictions which will come into force under the government’s new three-tier system with London facing tighter restrictions from midnight on Friday.

Under this generalised gloomy climate, investors are waiting to hear whether the UK will continue with the Brexit talks. Last month, Johnson had set a deadline for a possible deal for the 15th October, and said that if nothing had been agreed, both sides should “accept that and move on.”

At a Brussels summit on Thursday, the EU proposed “two to three weeks” of negotiations. Investors are now closely watching to see whether the PM will try and resume the negotiations or stick to his threats and walk away.

Brexit pessimism pushed the pound lower against the US dollar, while it remained flat against the euro. At the same time, the prospect of tighter lockdown restrictions could further hurt the pound and threaten economic recovery. Jasper Lawler, head of research at LCG, said that more lockdown measures could push the UK and European economies into a deep recession: “The British government is under pressure to follow scientific advice for a 2-week circuit breaker national lockdown but has so far resisted, but has raised the capital to the Level 2 tier of restrictions. That means two different families can no longer mix indoors- be that in their home or in a pub or restaurant. There is still no sign of the joint European recovery fund so in the meantime economies stand to take the hit – risking a double dip recession – from the new restrictions.”

Angela Merkel urges Boris Johnson to keep negotiating over Brexit

The German chancellor has urged Boris Johnson to continue and not to walk out of the trade and security negotiations. In her comments that were designed to calm the atmosphere, Merkel said that both sides needed to find common ground: “In some places things have moved well, in other places there is still a lot of work to be done. We have asked the United Kingdom to remain open to compromise, so that an agreement can be reached. This of course means that we, too, will need to make compromises.” Her comments also come after Thursday’s summit where French president, Emmanuel Macron, demanded that the UK accept the bloc’s conditions or face a no-deal exit.

The EU had proposed a further “two to three weeks” of negotiations as the EU’s chief negotiator, Michel Barnier is scheduled to be in London on Monday to continue negotiations. Like Merkel, Barnier also said that the EU wants to give every chance to the negotiations so they are successful: “We’re available, we shall remain available until the last possible day.”

The UK’s chief negotiator, David Frost, expressed his disappointment after Thursday’s summit and tweeted: “Disappointed by the conclusions on UK/EU negotiations. Surprised EU is no longer committed to working ‘intensively’ to reach a future partnership as agreed with [the European commission president, Ursula von der Leyen] on 3 October. Also surprised by suggestion that to get an agreement all future moves must come from UK. It’s an unusual approach to conducting a negotiation.”

The foreign secretary, Dominic Raab, said that a deal was still possible: “We’ve been told that it must be the UK that makes all of the compromises in the days ahead, that can’t be right in a negotiation, so we’re surprised by that, but the prime minister will be saying more on this later today. Having said that, we are close [to a deal]. With goodwill on both sides we can get there.”

While challenges remain when it comes to the Brexit negotiations with the level playing field, fisheries, and governance, still unresolved, many are positive that there could be an agreement if significant work is done.

Are you Transferring funds abroad?

If you are concerned about a no-deal Brexit, and the British currency remaining sensitive to Brexit uncertainty, you should get professional assistance when transferring funds abroad. Get in touch with Universal Partners FX to find out about efficient risk management and tailored solutions.

If you are considering buying a dream home abroad or simply investing in a desirable location where you can rent your property or relocate for good, then you must have looked at Spain as your top destination. Well, you were not wrong, as Spain continues to top the list for places to relocate or buy a property abroad.

According to iProperty Management’s research, Spain, which is already the top destination for Brits,  was the most searched for country, with 690,360 searches, 37,600 of which were from UK internet users. Following Spain, with less than 194,000 searches was Canada.

Spain is especially popular with Brits who made up 69% of expats in 2018. According to the data, those who want to invest in a property that will see demand from expatriates looking to relocate, should consider Spain. Among the top five, France and Portugal have also been a favourite location for Brits and the two countries saw 484,800 and 212,280 searches, respectively.

The interest in these countries does not simply result from the fact they are beautiful and desirable locations for retirement or for vacation. They are members of the EU and thus residents living in each of them are allowed to move and work freely.

 Spain is cheaper than London!

If you are hoping to get onto the property ladder, Spain is a good option. There are plenty of reasons for that as the number of expats in the Costa del Sol could attest. But beautiful location, gorgeous buildings, sunny beaches and good food can simply explain why you would want to settle there.

If you are buying property, the choice of buying within a gated community such as those located in the towns of San Pedro de Alcantara and Estepona, can offer security and peace. According to the Olive Press, a three bedroom apartment in Estepona  will cost around £200K, whereas the same amount could only get you a studio apartment in London, for example.

Places such as Marbella and Banus are also appealing due to the fact that they are secure and provide a great lifestyle. But also other areas on the Costa del Sol such as Casares Costa. Estepona, for example is only 20 minutes west of Marbella and is relatively cheaper than other more sought-after locations while offering a more authentic flavour of Spain. Guadalmina Ata poses a more pricey location where one can purchase beautiful properties exceeding €2 million.

For many Brits, and due to Covid-19 and Brexit, Spain appears to be the ultimate destination where they can retire and feel secure, while remaining part of the EU. Indeed, the number of Brits buying property in Spain has risen a lot recently due to Brexit.

Just looking at the data showing where Brits are registered in Spain, is indicative of the places and the kind of appeal they have for different age groups. The British community is concentrated along the coast, in Alicante and Málaga, and more than a third of residents are over 65. Madrid and Barcelona are a favourite among the younger generations who want to work and enjoy a more busy lifestyle.

Currency Exchange

If you are buying a holiday home in Spain, it is important to consult a specialist foreign exchange company such as Universal Partners FX right from the start. UPFX can help you manage currency fluctuations by locking the rate, as the final price of your home could vary significantly from the time you made your offer.

When moving large amounts of cash, it is best to get in touch with UPFX’s currency specialists where they can offer you competitive exchange rates and the best value for your money. Find out what your money is worth by giving them a call or requesting a free quote.

There are many incentives to buying property overseas, especially when you choose to buy your dream home in a place such as Portugal. From the beautiful countryside to its beach resorts and golf communities, Portugal has a lot to offer. For those investors who are looking for a good opportunity, the country’s low taxes and its strong rental market are key to seal the deal.

But how is the current property market, and how does Brexit and Covid-19 affect your buying plans?

The price of a property can be severely impacted by various factors such as the state of the economy, both in the country of residence and in the country you are buying in, as well as supply and demand. You might also want to consider that the investment you are making now will not be affected by the political climate in the specific country. 2020 has been a difficult year, as many countries, including the UK are still dealing with the effects of the coronavirus pandemic and the prospect of further lockdowns, while Brexit is still looming in the near distance.  The pandemic has deeply hurt economies and has inevitably hurt property prices home and abroad, making earlier investments seem more affordable now, which is not necessarily a bad thing.  

Brexit will accelerate the process of buying a home

British buyers are trying to secure their property abroad and their right to residency by buying before the Brexit deadline. Estate agents predict that the autumn will be a busy time for buyers dominated by higher property prices until the end of December, indicating that it is perhaps better to start your research now and ensure you do not pay more for a house you could have got much cheaper earlier.

Portugal, for example, has taken steps to attract British buyers, especially retirees by offering attractive tax schemes. Portugal is ranked the best country in the world for expatriates.

NHR Tax Status

In 2009, the Portuguese government introduced the Non-Habitual Tax Resident status (NHR) to attract high value residents, and it offered reduced tax rates and some exemptions for the first ten years in the country. Until recently, NHR allowed most foreign pension income to be tax-free. However, the 2020 Portuguese Budget introduced new changes to the NHR approved by the Portuguese Parliament on Thursday 6th February 2020. According to it, there will be a 10% tax on the foreign revenue of British pensioners and other foreigners who move to Portugal, with those living there before 2020 not being affected. If you already have NHR status or applied for Portuguese residence before 1 April 2020, when the new regime came into effect, you can still be eligible for exemptions on your UK pension income for the remainder of your ten-year NHR period.

No matter what, the tax is much lower than that charged in other countries such as the UK and significantly lower than the Portuguese income tax rates of 14.5% to 48%. It is still considered very attractive to foreigners.

The proposed changes come to address specific tax regimes and visa schemes that offer EU residency rights in return for property purchases. Retired Portuguese nationals and residents outside the NHR regime cannot access such tax breaks, there has also been pressure for change from within Portugal itself.

Whether low taxes or the Portuguese lifestyle itself seem appealing to you, real estate agents argue that now is the right time to buy and transfer your money abroad to complete your property purchase. They see that confidence will soon return to the market by the autumn of 2021 and that the first few months of the year will present an even bigger opportunity to buy.

If you are a British buyer, and want to secure a strong investment opportunity, now is the time to get in touch with your currency broker. A currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.

When considering buying your dream home in Portugal, Universal Partners FX can give you peace of mind when sending money overseas. If you want to schedule ahead and safeguard your funds, talk to one of their foreign exchange experts today.

 

The pound rose against the dollar on Wednesday, as the greenback was under pressure following the release of disappointing US retail sales figures for August.

The GBP/USD pair rose higher to weekly tops, despite the Brexit impasse and the latest saga with Boris Johnson’s Internal Market bill.

Wednesday's main event was the highly anticipated FOMC monetary policy decision - where rates look set to remain stable at near zero - and updated economic and inflation projections, ahead of Thursday’s BoE meeting. Due to the key FOMC event, trading opportunities and volatility around the GBP/USD currency pair might arise ahead of the event.

Brexit

The pound was also supported after Justice Secretary Robert Buckland hinted the Government could amend the Internal Market Bill in order to compromise with Tories criticising the PM for breaking an international treaty and avoid a rift within the Conservative party. The government’s change of heart could help soften the EU’s stance and resume negotiations with the EU.

Buckland said that the original plans in the Bill could be made "acceptable to all Conservative colleagues".

With investors digesting the political reality and remaining confident that a deal is still possible, the pound was lifted after the initial news of the Internal Market bill.

"Outsized moves in GBP ... have injected a sizeable risk premium in GBP. It's now trading at a decent discount on our short-term valuation, underscoring that some of the recent Brexit news has already been priced in. At the very least, this backdrop suggests that in the coming weeks GBP would benefit more from good news rather than sink further on bad news. We still expect more volatility but risk/reward favours taking profit at these levels," said Mark McCormick of TD Securities.

Bank of England Policy and Interest Rate Decision on Thursday

The Bank of England will try and assess on Thursday the UK’s economic recovery and whether it needs to adjust its policy to offer more monetary support. For many economists, now it is not the right time to make significant changes to its package. Adding to the Bank’s woes about the UK economy comes the UK inflation which fell to its lowest level in nearly five years, to an annual 0.2%, far away from the Bank’s official 2% target.

The Bank is expected to take action in its November meeting, as the economy slowly recovers. According to the Organization for Economic Cooperation and Development forecast released on Wednesday, UK gross domestic product would shrink by 10.1% this year, while the economy is forecast to rebound in 2021. Given the political and economic uncertainty, the BoE will possibly wait and see what kind of fiscal stimulus is necessary to support the economy. But Reuters noted that “While the central bank is widely expected to hold fire, policymakers are likely to conclude that downside risks to the economy are rising for the economy due to rising Brexit uncertainty and renewed restrictions on social activity.”

Are you Transferring Funds Abroad?

If you are worried about the possibility of a no-deal Brexit, and the British currency remaining sensitive to Brexit uncertainty, you should get professional assistance when transferring funds abroad. Whether you are sending money to family or friends, paying employees overseas, or managing regular payments abroad, you need to protect your international payments’ budget from market volatility. Get in touch with Universal Partners FX to find out about efficient risk management and tailored solutions to your transfer needs.

Fears that Britain will leave the European Union without any trade agreement sent the pound to new 5-1/2-month lows on Friday, despite the UK economic recovery and a new trade deal with Japan. Businesses are as worried as ever as Boris Johnson’s government continues to defy calls from the EU to be more flexible and meet its demands. With Johnson’s latest controversial bill, businesses that export and import goods from/to Ireland are in a precarious position.

Theresa May, the former prime minister, asked: “How can the government reassure future international partners that the UK can be trusted to abide by the legal obligations of the agreements it signs?”

Worst week for the pound

Reuters reported that this is the worst week for the pound both against the euro and the dollar since mid-March. The fall was the result of reports that “Brussels has stepped up planning for a ‘no-deal’ Brexit after Prime Minister Boris Johnson’s government refused to revoke an ultimatum on breaking the divorce treaty which Brussels says will sink four years of Brexit talks.”

Klaus Baader, global chief economist at Societe Generale said: “The probability between a deal and no-deal are definitely shifting towards a no deal -- that is very clear. The risk of a no-deal is increasing every day.” Morgan Stanley also said that the risk of Britain exiting on “WTO terms” had risen to 40% compared to 25% earlier.

UK Rejects EU’s Demands, as Brexit Uncertainty Increases

The EU has warned the UK that the controversial elements of the Internal Market Bill are illegal and that it will need to remove them by the end of the month. Tories have also criticised Boris Johnson’s proposed Internal Market Bill, which will be debated on Monday by MPs in the House of Commons.

The new bill puts into question the Northern Ireland protocol, which is part of the Brexit withdrawal agreement approved in January. The protocol ensures that the province will come under the European Union’s single-market rules in order to avoid a hard border in Ireland. However, the new law would give UK ministers the right to change rules regarding the movement of goods if the UK and EU are unable to reach a trade deal. A government spokesman said that the bill will "ensure the government can always deliver on its commitments to the people of Northern Ireland". The bill tries to bypass the formal discussions and bend the rules to deliver Brexit at all costs.

The EU said that these new changes needed to be removed as they jeopardise the UK-EU trade talks. But the government has defied the EU saying that the PM’s proposed bill seeks to protect the “integrity of the UK and the peace process in Northern Ireland.”

On Monday, informal talks between the two sides will resume as differences remain and Brexit appears as uncertain as ever. With the UK government referring to the EU’s lack of realism, one would perhaps question whether discussions will reach any agreement or things would soon diverge even further.

The next official round of talks will begin on 28 September.

Positive News Fails to Lift the Pound

News that the UK has struck its first major “historic” post-Brexit trade deal with Japan has done little to offer substantial support to the pound. The deal will boost trade by about £15bn and International Trade Secretary Liz Truss said that it would bring "new wins" for British businesses in manufacturing, food and drink, and tech industries. However, critics said that the deal will only slightly boost the UK GDP by only 0.07%, which is not comparable to the trades that will be lost by leaving the EU. Britain said that 99% of its exports to Japan would be tariff-free.

But neither this news helped support the pound, neither the fact that the Office for National Statistics reported that UK economic output grew by 6.6% in July as pubs, restaurants and other sectors reopened.

Are you a Business Transferring funds abroad?

With businesses worried about the possibility of a no-deal Brexit, and the British currency remaining sensitive to Brexit uncertainty, you should get professional assistance when transferring funds abroad. Whether you are importing or exporting goods, paying employees overseas, or managing regular payments abroad, you need to be prepared and protect your business and bottom line from market volatility. Get in touch with Universal Partners FX to find out about efficient risk management and tailored solutions to your business’ transfer needs.

Plans for buying property may have been postponed for a while due to the Coronavirus lockdown restrictions, but as these begin to ease, Brits’ interest in foreign property has been reignited. Now cities in such European countries as Spain, France, Italy, Portugal and Greece are sought after, as Brits’ love for warm climes and sandy beaches has been rekindled.

Costa del Sol in Andalusia, southern Spain, has always been one of the most sought-after locations for Brits and will continue to remain one of the most desirable places for property investment.  While the real estate market has suffered considerably during the coronavirus crisis, since 18th May when viewings have been permitted again, there has been an increase in requests, boosting confidence that the real estate market will undergo a quick recovery.

Costa del Sol

Famous for its beautiful beaches, art and culture, amusement and national parks, the birthplace of Picasso has always been among Brits’ favourite places, both for their holidays, but also for living and buying property.

Its beauty and popularity have not faded due to the pandemic. Instead, luxury villas and high-end developments in hot spots have retained their value. Other areas might become even more overpriced, while other less sought-after locations might have more realistic prices. According to Olive Press, “when it comes to new developments along the Costa del Sol, again, this wonderfully touristy area ensures a healthy outlook. The construction industry is seeking help to ease it through these difficult times, with calls to rethink new construction tax and bureaucratic processes.”

What to consider

  • Prices and Currency Volatility: The cost of a European property in Sterling can change drastically due to currency volatility as a result of political, economic or other events such as the current pandemic. Markets will always be moving, and prices will remain unpredictable, especially with Brexit uncertainty, the Bank of England’s possible move into negative interest rate territory and the increasing worries about the slow economic recovery.
  • Brexit: This is another topic that is likely to concern home buyers as there might be significant changes in regulations including the stamp duty and increased taxation. Despite the uncertainty, UK citizens will be able to buy homes abroad and live there. You will be able to stay, if you are legally resident in Spain before the transition period ends on 31 December 2020, but you will need to register as a Spanish resident if you want to stay in Spain for more than 3 months. If you are living in Spain before 1 January 2021 and register as a resident after 6 July 2020, you will be issued with a biometric residence card (Tarjeta de Identidad de Extranjero). If you move to Spain after 31 December 2020, there will be different immigration requirements.
  • Your strategy when transferring funds: Since you will be transferring a large amount of funds, you will need to consider how much that will worth after the exchange. Getting in touch with a currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.

If you are considering buying your dream home in Spain, get in touch with Universal Partners FX so you can have peace of mind when sending a large amount of money overseas. If you want to schedule ahead and safeguard your funds, talk to one of their foreign exchange experts today.

The British Pound has remained under pressure on Friday, especially after Thursday’s losses due to disappointing news that the Brexit negotiations have hit an impasse. Today’s (24/07/2020) better than expected retail sales did not help push the pound higher against its major rivals.

Brexit and Covid-19

Despite positive macroeconomic data, the coronavirus pandemic and concerns about the state of the Brexit trade negotiations have weighed on the pound. As the Guardian reported, on Friday morning the release of “the retail figures are doing little to support UK stocks with the FTSE 100 down 1.36% and the more domestically focused FTSE 350 down 0.6%.”

Positive Retail Sales’ Numbers

The easing of lockdown in mid-June helped UK retail sales beat forecasts in June. The Office for National Statistics has reported a 13.9% month-on-month rise in UK retail sales last month, marking an 8% uptick. Even for former Bank of England policymaker Andrew Sentence, the figures highlighted that the UK was on its recovery since the Covid-19 outbreak. The retail sales’ increase was the result of consumers spending for DIY and home improvement products due to the lockdown, with shops selling hardware, furniture and appliances doing particularly well, and reaching near-pre-lockdown sale levels.

With the easing of lockdown measures, consumers preferred real physical shops rather than online shopping, as the ONS noted that the proportion of online sales retreated from its record peak in May. Online spending, however, remained at 31.8%, higher than February’s 20%. UK total retail sales are now just 0.6% lower than February before the lockdown.

ONS deputy national statistician Jonathan Athow said:

“Retail continued to recover from the sharp falls seen in April, with overall sales now almost back to pre-pandemic levels. But there are some dramatic differences in sales across the retail industry. Food sales continue above their pre-pandemic levels due to the closure of cafes, restaurants and pubs. Online sales have risen to record levels, and now count for £3 in every £10 spent. On the other hand, clothing sales remain depressed and across the high street sales in non-food stores are down by around one-third on pre-pandemic levels. The latest three months as a whole still saw the weakest quarterly growth on record.”

With the exclusion of fuel sales, due to the lockdown and limited travelling, the level of sales was 2.4% higher than in February. According to figures, Britain’s economy shrank by more than a quarter in March and April and recovered slightly in May.

Is the UK economy recovering?

Former Bank of England policymaker Andrew Sentence said that the figures highlighted the UK was on its recovery since the Covid-19 outbreak. The Bank of England’s chief economist, Andy Haldane, has also pointed to a V-shaped recovery with the economy growing by around 1% a week, something that many of his colleagues have questioned. The British Retail Consortium said that spending among large high-street chains was 3.4% higher this June than last year.

As investors await the release of more figures to confirm expectations of a sustained economic recovery, the pound will remain under stress with Brexit as well as the growing number of deaths from Covid-19. If you are buying a home overseas or want to transfer funds to family and friends living abroad, get in touch with our friendly  Universal Partners FX team. UPFX’s dedicated foreign exchange specialists can help you access the most competitive exchange rates and make your currency transfers stress-free.