Brexit uncertainty

Brexit has weakened Britain’s manufacturing sector as the latest industry health check from data firm Markit showed. New orders and employment declined last month due to Brexit uncertainty and the impact of the US-China trade war. This was the worst performance for Britain’s factory sector since the EU referendum three years ago.

Firms reported that they have slowed their stock-piling, after the latest Brexit extension to the 31 October. While businesses had been stockpiling to meet the original deadline for Brexit at the end of March, order books shrank rapidly. According to economists, Britain’s factories could be heading into a recession now that the possibility of a cliff-edge no-deal Brexit is no longer on the table.

Markit says: “New order inflows deteriorated from both domestic and overseas sources. New export business fell for the second month running and at the quickest pace in over four-and-a- half years. Manufacturers reported lower demand from Asia and Europe. There was also mention of Brexit uncertainty, including clients diverting supply chains away from the UK, leading to lower demand from within the EU.”

This resulted in Markit’s UK manufacturing PMI fall to 49.4, which is the lowest reading since July 2016, when factories were recovering from the Brexit vote. Despite hopeful predictions from the City which forecasted the PMI around 52, unfortunately, the sector contracted in May.

What is the PMI?

The purchasing managers’ index (PMI) is a closely watched survey that shows the health of the manufacturing sector, which was 53.1 points a month earlier. The IHS Markit /CIPS UK Manufacturing PMI is compiled by IHS Markit from results gathered from questionnaires sent to purchasing managers in a panel of around 600 manufacturers.

What were the UK survey’s findings?

The decline was something experienced by both manufacturers in the UK and the Eurozone, who suffered a considerable decline, with the purchasing managers’ index falling from 47.9 in April to 47.7 in May.

The UK survey found that the Brexit delay was followed by a decrease in domestic and overseas orders. Brexit uncertainty caused companies to move supply chains away from the UK, while limited production meant a second month of job losses. Despite the contraction, manufacturers remain positive and believe that a Brexit deal will be in place, with 49% expecting a higher output in a year.

Rob Dobson, a director at IHS Markit, said: “The UK manufacturing sector was buffeted by ongoing Brexit uncertainty again in May. The trend in output weakened and, based on its relationship with official ONS data, is pointing to a renewed downturn of production.”

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “Concern for manufacturers has deepened this month as the sector’s performance shrank in May and tumbled into contraction. With one of the fastest shrinking rates seen in six and a half years and the biggest drop since July 2016, straight after the referendum result, based on this result, there is the likelihood of more bad news to come.”

Manufacturing Organisation Make UK’s Warning

Before the disappointing data from Markit, Make UK, the UK’s leading manufacturing organisation, had already warned that a no-deal Brexit will be damaging to the economy, reporting weak investment.

The manufacturing organisation said that the UK leaving the EU without a deal will be “economic lunacy.” From Boris Johnson, and Andrea Leadsom, to Dominic Raab and Sajid Javid, all these candidates to replace Theresa May as the Tory leader, have agreed to press for a Brexit on 31 October, whether or not there was a deal.

Chief executive of Make UK, Stephen Phipson explained that the manufacturing sector was on a “weakening trend.” He added: “Earlier this year there was clear evidence that industry was on steroids as companies stockpiled. Underneath, however, there is now growing evidence of European companies abandoning UK supply chains, while Asian customers balk at the unknown of what may exist as the UK leaves trade agreements which operate under EU rules.”

If you are a manufacturer or a business that is exporting or importing, then, possibly, Brexit anxiety has affected your finances. Save time and money on imports and exports when using Universal Partners FX. Universal Partners FX is the best option for wholesale and distribution companies making regular payments. Get in touch with your dedicated dealer and take advantage of expert knowledge and strategic financial planning.

Buying property as the pound drops

Buying property abroad is exciting, but you need to be aware of the constant fluctuations of the pound sterling, which has been greatly affected by recent Brexit delays.

No-deal Brexit and May’s resignation

With the European Parliamentary elections and the constant fear of a no-deal Brexit, the political and economic landscapes remain under threat. The possibility of a no-deal Brexit and a weakened pound would only aggravate the situation. At the moment, after Prime Minister Theresa May’s resignation, things have become more complicated as everyone is wondering who can succeed her in the position and how this could further affect the economy. Her succession by a Leaver and Brexiter such as Boris Johnson can only mean more uncertainty as he has insisted that the UK must leave the EU on 31 October “deal or no deal.” This is definitely not what economists and the markets want to hear.

Economists point towards May’s inefficiency and inability to secure a Brexit deal with the opposition party, as the source of her troubles. The British pound has reacted negatively by slipping for three consecutive weeks.

Brexit deal: What is happening?

The weight now falls on the next prime minister, as business leaders are pressing and demanding that the next prime minister would need to have a clear plan that could reinvigorate Brexit discussions. The worst scenario is the choice of someone that would recklessly defend a no-deal Brexit that, as many politicians and economists agree, could only have a destructive result. As mentioned, Johnson is the favorite among Tories, but the competition is high, with 20 rivals competing and others concerned about his immoderate stance. As the Guardian reported, “moderate Tories alarmed at the prospect of him leading the country to a no-deal Brexit rapidly launched a ‘Stop Boris’ campaign.”

Chancellor Philip Hammond has warned both Johnson and former Brexit secretary Dominic Raab that any prime minister backing a no-deal Brexit would face a no-confidence vote. On the other hand, Jeremy Hunt is clearly against a no-deal Brexit which he has described as “political suicide.” As the situation remains uncertain, the pound’s trajectory would be influenced by the next prime minister and the way they deal with Brexit.

Buying property in Europe: Pound/Euro exchange

The pound has had a terrible run against the euro, and finance experts have forecasted that it will continue. GBP is set to slide as everyone is waiting to see who will be the next prime minister. Sterling will possibly remain very low against the euro due to the ongoing political uncertainty.

If you are considering transferring funds to buy your property abroad, this is the right moment to get in touch with a currency expert such as Universal Partners FX.

Foreign exchange experts such as UPFX have a lot of experience in transferring funds overseas and understand the various hurdles individuals and first-time house buyers face when they want to invest in property. They take the utmost care in understanding your needs and tailoring solutions that will help your finances go further. Delivering fast and secure transfers at the lowest price possible has been UPFX’s long-term goal and they will do everything they can to help you with regular transfers. By managing market volatility and protecting your hard-earned funds from the frequent fluctuations of the pound, their expert consultants monitor the markets on your behalf. By minimizing risk and having a deep knowledge of currency volatility, UPFX will aim to give you the best possible deal. Get in touch with your dedicated dealer and find out how much you can save on your international money transfers.

Brexit

France and Spain’s property markets are among the favorites for many Brits, despite Brexit. In many ways, Brexit did not change Brits’ desire to move permanently to France or Spain, indeed, it has, paradoxically made it stronger. With Brexit strategy in tatters, the UK confused about its own European identity and a climate that cannot compete with that of sunny Spain, for example, many are determined to look for a home overseas.

Uncertainties of moving abroad

Planning to purchase property abroad is a long process, and for those who have already started or are in the midst of deciding, there is nothing that can really stop them, not even the uncertainty of Brexit. Nonetheless, there are worries about their new life in Europe. For instance, many Brits worry about the lack of affordable healthcare, long legal processes of buying property, or just simply maintaining their property back in the UK due to a weak pound. But these are issues that can be tackled, to a certain extent. Finding a place in the sun to retire is perhaps a bigger enough reason that propels Brits to move abroad, even though they are aware of the possible problems. A peaceful life in the countryside is definitely more attractive, than remaining trapped in a little house back home. Enjoying a higher standard of life is a solid fact that cannot be shaken by the uncertainties of the process or the current unstable political landscape. As many have enjoyed the perks of living abroad through their regular visits and holidays overseas, it is very difficult to resist the lure of the good weather and of long cool nights under starry skies.

More European because of Brexit?

With the European elections taking place from the 23 to 26 May, it is impossible to forget Brexit. It is interesting to see how it has affected Brits in the way they perceive themselves. According to Radio France Internationale, 23-year-old English au pair Emma has been in France since August and despite coming from Thetford, where many voted for Brexit, she feels European and wants to live in Europe. It was, ironically, Britain’s decision to leave the EU that pushed her to move to another country. Like many other Brits living abroad, Brexit has affected their decision and made them understand the benefits of their European heritage. As the article reported, “the Brexit decision has created practical problems for them but also raised questions about identity.”

Sterling and Brexit

Whether motivated by Brexit or your own personal desires and wants, the decision to move overseas comes with a lot of considerations. One of the biggest ones is making your money go further, and taking advantage of currency volatility so that it does not affect your savings. Everyone has noticed that this week the pound has suffered against the euro due to turmoil in Downing Street affecting currency markets worldwide.

The fact that Theresa May’s premiership is now being questioned after her failure to get approval for her Brexit deal, has impacted on the pound, which dropped against the euro.

Theresa May’s time is coming to an end. Initially against Brexit and later having to negotiate a deal— which for many hardcore backbenchers and hardline Brexiteers was not desirable or close to what the British people have voted for in the 2016 referendum—May was given an almost impossible task. Her replacement and the possibility of a no-deal Brexit are now appearing to be, not only the stuff of nightmares, but also a reality leading currency traders to avoid the pound.

Buying property overseas is a complex process and having a trusted currency broker by your side is a massive advantage when it comes to the current movement of the pound. Universal Partners FX can help you navigate a volatile market and transfer money internationally, mitigating the negative effects of Brexit and a weak pound, and ensuring that your funds are not impacted by exchange rates. Get in touch today with your currency dealer and find out how much you can save on your currency transfers.