If Brexit was a boxing match, it would be fair to say that the UK narrowly lost the first round after conceding to the EU’s demands to focus on discussing citizens’ rights before trade agreements. However, after a brief rest in the corner, the second round begins now. It awaits be seen if David Davis will come out fighting, or will again be happy with being a standing punch bag for the EU attack.
If the Brexit divorce wasn’t enough to worry about, rumours are now circulating that May’s leadership is also under threat from within. There is speculation that none other than David Davis is the bookies favourite to replace Theresa May, perhaps even before the Conservative party conference in the autumn. Whilst we are of the belief that this is likely to be pure press speculation fabricated for the sole purpose of selling newspapers, it is hardly the best position to be in before we enter important divorce discussions.
On a non-political front, there has been a lot of discussion amongst investors that we are going to see a rate rise from the Bank of England next month. If this was to happen, it could well strengthen the Pound significantly. Having said that, Mark Carney may well use today’s release of inflation data to delay this decision. June’s figure came out at 2.6%, rather than the 2.9% expected, well below the 3% target. As soon as this data was released, we saw Sterling drop by over 1% across the board.
So does this mean that Sterling is going to continue on a downward trend? Not necessarily. Yes, the Pound is very sensitive on the downside to any negative sentiment but it is just as sensitive on the upside. Any releases from Brussels suggesting that negotiations are going well and that we may be in for a ‘softer Brexit’, then we could well see a big uplift on the Pound. The importance of this is that there are excellent opportunities to be had at the moment because of the increased volatility.
When buying a property overseas, it is extremely important to take the changing exchange rates into account. Argentex offer a bespoke and comprehensive advisory service to all of its clients to help them time their transfers effectively. In addition, their exchange rates are up to 3% better than any major bank which can make a huge difference to the cost of any property.