Pound to euro exchange rate: Sterling suffers fresh decline – should you buy travel money?

The pound to euro exchange rate “hit a three-week low” yesterday, experts have said. Insecurity over Brexit and potential BoE interest cut rates have been dominating sterling’s movement.


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The pound is currently trading at 1.1642 against the Euro, according to Bloomberg at the time of writing.

Last week, MPs voted in favour of the third reading of the Brexit Withdrawal Agreement Bill but the sterling stayed ‘unfazed’.

Following comments made by policymakers Silvana Tenreyro and Gertjan Vlieghe regarding potential support for the Bank of England cuts to interest rates, the pound hasn’t seen much traction so far this week.

Michael Brown, Senior Market Analyst for Caxton FX, told Express.co.uk: “Sterling struck a softer tone on Monday, falling to a three-week low against the common currency, after data showed the economy shrinking by 0.3 percent in November, raising the chances of the Bank of England loosening policy. 

“In fact, markets now price a roughly even chance of the BoE cutting rates as soon as this month’s policy meeting.

“Today, the data calendar remains quiet, hence – barring any further comments from BoE policymakers – the pound should remain range bound.”

Discussions around potential interest rate cuts began after Ms Tenreyro’s speech on Friday where she said that the British economy’s response to Brexit developments would be key to whether the Bank of England cuts interest rates.

“A key input in the decision is how uncertainty unwinds going forward, and how that impacts on demand.

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“We will be watching very closely how firms and households respond to Brexit developments,” said Ms Tenreyro.

“We are talking about the coming months, or I am talking about the coming months, on the possibility of further stimulus.”

Her points were followed by fellow Brexit policymaker Gertjan Vlieghe, who told the Financial Times he will consider voting for a rate cut depending on how the economy has performed since the election in December.

“It doesn’t take much data to swing it one way or the other and the next few [MPC] meetings are absolutely live,” he said.


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“I really need to see an imminent and significant improvement in the UK data to justify waiting a little bit longer.”

So what does this mean for Britons heading off on their holidays and hoping to buy travel money?

The Post Office is currently offering a rate of €1.1269 for over £400 and €1.1559 for over £1.1491.

How the economy performs following Brexit is creating a sense of uncertainty for many.

However, Britons could play a key role in boosting the economy through their travel habits.

According to a new study, Britons will add £27billion to the UK economy with staycations in 2020.

The research, conducted by UK hospitality job board Caterer.com, discovered 70 percent of British travellers are planning a break in the UK for 2020, marking an increase in the predicted number of staycations compared to the previous year.

The study added that the average Briton is planning UK holidays at least twice in the next 12 months, meaning a huge boost for the local economy – specifically hospitality jobs.

Neil Pattison, Director at Caterer.com, said: “Whilst domestic trips are on the rise, there is also positive news for the sector in terms of international tourism, with a new tourism sector deal released last year committing to 130,000 new hotel rooms catering for the millions of additional tourists predicted in the UK over the next five years.

“For both employers and employees within the sector this is welcome news, demonstrating ample opportunity for growth and development.”

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