Uncertainty over the UK’s position in Europe and a possible “Brexit” has seen the pound weaken considerably against the euro in recent weeks. It’s now trading at about 78p to the euro, which means that for every €100 you have, you’ll now get about £77; by comparison, at the end of November last year you’d have gotten just £70.
For consumers, stung by the high costs of visiting or shopping in the UK, the movement in the currency may offer some welcome respite. And, if the forecasts are right, sterling is likely to continue to weaken ahead of June’s referendum.
A Six Nations trip
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If you’re travelling to London for this Saturday’s crunch game against England, you’ll find that it has just become cheaper. While you won’t save on the cost of your match ticket, having likely bought it some weeks or month in advance, all the ancillary costs associated with travelling to the capital, which is
Take a room in the Marriott Hotel in Twickenham. If you booked the room on December 1st, you might have gotten a rate of £149 a night, or €211. Today that room will cost you just €193. A return ticket on the Heathrow Express costs £36 - or €51 in December compared to €46.55 today.
Apint in December would have cost you £4.00 (€5.68). Today it will be just €5.17.
Used imported cars
Private imports of used cars took a tiny uptick in January, thanks to a faint improvement in the exchange rate between the euro and pound sterling. The rule of thumb in the motor trade is generally that at a rate of € 1 to 80p or better, shopping for your cross-border car - or ferrying one across the Irish Sea - makes sense. We are currently teetering at 78p, so used car dealers will be emailing the hauliers to check availability of car transporters in the coming weeks.
There is a ready market for used imports if the price is right. With the slump in new car sales between 2009 and 2014, there is a lack of three or four year old used cars on the Irish market. What’s more, UK imports are generally regarded as being of a good standard: often higher mileage but better cared for. It’s a bit of a stereotype about Northern and English motorists that they care for their cars better, but it’s a generally accepted rule of thumb in the motor trade.
Supermarket shopping
Yes sterling may yet be far off those heady days back in 2008 when it came close to parity with the euro, sending hordes of Irish shoppers across the border to seek out bargains. However, with petrol prices down considerably thanks to cheaper oil, and a weakening sterling, it may make sense once more to travel north.
A £100 shop in Sainsbury’s for example, will now cost you about €129, compared with €13 more before Christmas.
The FTSE 100
The UK stock market may have just gotten more attractive for euro investors for two reasons: Markets often rise when currencies fall; and buying stocks has just gotten cheaper. Indeed the FTSE 100 was up by 1.3 per cent by lunch time on Monday.
If you buy into a UK fund from an Irish fund manager it may be denominated in euros, which should cushion you from movements in exchange rates. If you buy shares directly however, you will be subject to more volatility - but may benefit from buying in at lower prices.
For investors already invested however, a weakening sterling may also weaken their returns.
Amazon
As the online retailer doesn’t have an Irish website, many buyers end up purchasing from the UK pages. A better exchange rate means prices will come down, making it easier to hit that magic spending limit, above which you get free delivery.
Take a Game of Thrones Season 1-4 box set. At £34.99 plus delivery of £4.96, the total cost is £40.83 or €52.79 today. If you had ordered it for Christmas it would have cost you an extra €4.
Premiership football match/Legoland/ holidays in the UK
We often think about long-haul for our holiday breaks but a better exchange rate makes the lure of our next-door neighbour more appealing for everything from that week-long tour of the Scottish highlands to the shopping break in London.
UK property
If you’ve been considering a UK property purchase, it may have just gotten a whole lot cheaper.
In greater London, the average price of a property is now a staggering £643,843, according to Rightmove.co.uk. This means that in early December, a London property would have cost you €914,771 - but today its value has slipped to €832,473, saving you more than €80,000.
In the north east, property is considerably cheaper, at an average cost of £144,999. However there are also savings to be made. The property that would have cost you €206,000 back in December, would now cost you €187,480.
Note currency convesions are sourced from oanda.com and are based on the bid and ask rates. Banks and retail outlets may apply a spread to these rates.
