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Brexit & Exchange Rates

It’s predicted that the pound could slide further against the euro because of Brexit. But if you look back over the past decade of exchange rates between the two currencies, the reality is a little different than some headlines would have you believe.

At time of writing, one pound will get you around 1.12 euro. Go back to 2013, and the exchange rate was at a similar level.

Think back to 2013, did you do anything different because of the apparent ‘drop’ to this rate? Yes, it has an impact on trade and business, and yes there are bigger macroeconomic things to consider – but ultimately, the fact that the exchange rate has dropped from above 1.40 euro in 2015 does not have a considerable impact on a large proportion of the UK population.

It’s also worth remembering that the FTSE 100 represents the UK’s largest 100 listed companies, which derive a large proportion of their income from outside this country. If there is a slump on the pound, their profits will rise when they repatriate income from abroad.

 
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