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Plummeting value of GBP since Brexit
Thread poster: Tom in London

Tom in London
United Kingdom
Local time: 05:31
Member (2008)
Italian to English
Oct 11, 2016

Since Brexit, the British Pound has come close to 1:1 parity with the Euro. It is quite shocking that this has happened in less than a month.

I normally get paid in Euro so on paper it looks as if my income is going up, but of course the big picture is that for anyone trading across the EU, the British economy is crashing and the price of everything that's imported is going up - so I am not better off at all.

I'm glad I don't invoice in GBP because I would have to be slashing my rate.

Your thoughts?

[Edited at 2016-10-11 09:44 GMT]


 

Dan Lucas  Identity Verified
United Kingdom
Local time: 05:31
Member (2014)
Japanese to English
Glass half full Oct 11, 2016

Tom in London wrote:
the price of everything that's imported is going up - so I am not better off at all.

If you're shocked by volatile exchange rates, you must not have had much experience watching them!

Whatever the good or bad in the longer term, to quote Graham "In the short run, the market is a voting machine but in the long run, it is a weighing machine." It's voting (reacting) rather than weighing (considering) at this point.

Personally I haven't seen any material increase in costs. I invoice mostly in yen and euro, so my income has been significantly boosted by the weaker pound, which is great. If your revenues are denominated in other currencies the overall impact should be strongly positive, simply because revenues are larger than costs for any business that turns a profit.

Translation businesses that deal only in GBP are probably going to take a minor hit as costs go up. At some point the markets will decide they've gone too far and roll back the other way. When that happens my revenues will fall on a like-for-like volume basis, but some costs may drop. It's good to be an exporter at times like this.

Regards
Dan


 

Tom in London
United Kingdom
Local time: 05:31
Member (2008)
Italian to English
TOPIC STARTER
Not great Oct 11, 2016

Dan Lucas wrote:

.....I invoice mostly in yen and euro, so my income has been significantly boosted by the weaker pound, which is great....


Now watch as all your bills start going up. You are not better off.


 

Michael Beijer  Identity Verified
United Kingdom
Local time: 05:31
Member (2009)
Dutch to English
+ ...
Interesting times indeed. Oct 11, 2016

Tom in London wrote:

Since Brexit, the British Pound has come close to 1:1 parity with the Euro. It is quite shocking that this has happened in less than a month.

I normally get paid in Euro so on paper it looks as if my income is going up, but of course the big picture is that for anyone trading across the EU, the British economy is crashing and the price of everything that's imported is going up - so I am not better off at all.

I'm glad I don't invoice in GBP because I would have to be slashing my rate.

Your thoughts?

[Edited at 2016-10-11 09:44 GMT]


Yes, this is all very worrying. My first thought was: great, if the pound nosedives, all I'll do is benefit, since 90% of my clients pay me in euros. However, as you said, Britain will still need to import stuff (no matter how self-sufficient and isolated they wish to be), and a lot of this will come from Europe, so will be more expensive.

Another thing that is worrying me is what will happen with SEPA, IBAN transfers, etc. I currently have a Spanish bank account in euros, a Barclays bank account in euros, and a Barclays bank account in sterling, and usually play around a bit to see how I can get my clients' euros into my UK sterling acc. here in the UK without losing too much money. However, if the UK in fact leaves the EU and France and Germany get their way and we lose all kinds of rights and access to things, this might end up translating into higher bank and transfer fees for all of us poor bastids stuck on our island.

I'm actually in Barcelona at the moment, on a one-month working holiday with my wife and baby, and we have been toying with the idea of spending a year or two here in Spain. So who knows, we might jump ship if things get too bad in the UK. But only temporarily, as we up would still have our house in the UK, and most likely end up going back there. I mean, I like Spain, but can't really imagine myself spending the rest of my life here.

Michael


 

Tom in London
United Kingdom
Local time: 05:31
Member (2008)
Italian to English
TOPIC STARTER
Uncertainty Oct 11, 2016

Well Michael, as you see, Brexit is already happening- even though officially it won't be happening until the UK signs Article 50. Without waiting for Article 50 the GBP has already crashed not only in relation to the Euro but to all currencies.

The currency speculators are loving it but for everyone else in the UK, everything imported (not only from the EU) is already costing more, beginning from food.

The uncertainty of the present situation is being made worse by the British government, which doesn't know what it's doing and avoids answering questions from the opposition parties.

[Edited at 2016-10-11 10:17 GMT]


 

Ilan Rubin (X)  Identity Verified
Russian Federation
Local time: 07:31
Russian to English
Everything is relative, as Einstein would have said Oct 11, 2016

The history of the world is one of disaster, including genocide, war, disease, famine. Nobody has more of a birthright than anybody else to avoid disaster. Yet you're shocked about some 10-15% fall in the pound? It's not a crisis. It's nothing at all.

Over 2010 to mid 2014 I could buy a pound for 50 or so of my hard earned roubles. Then the rouble collapsed and a year ago it was 100 to the pound. Now it's about 75. Relax, embrace it, change your spending habits. More English beer, less French wine. Instead of 5 pairs of shoes make do with 4icon_smile.gif


 

John Fossey  Identity Verified
Canada
Local time: 00:31
Member (2008)
French to English
Nothing new Oct 11, 2016

Five years ago the Canadian dollar was on par with the US dollar. Now it's worth $0.76.

All it means is I now get more US business than I used to, because my price in USD is more competitive. I haven't made a significant change in my CAD price.

I think it's a media myth that currencies are "weaker" when they fall relative to other currencies. It just makes exporting more attractive.

[Edited at 2016-10-11 11:44 GMT]


 

Dan Lucas  Identity Verified
United Kingdom
Local time: 05:31
Member (2014)
Japanese to English
Arithmetic suggests otherwise Oct 11, 2016

Tom in London wrote:
Now watch as all your bills start going up. You are not better off.

Er, as a matter of simple arithmetic yes, I am better off.

Let's assume that my revenue is 100 and my living costs are 30. My profit is 100 - 30 = 70. If the pound weakens against the currencies in which I deal by 10%, my revenue will increase by 10% to 110. If my costs increase by an equal amount of 10% - unlikely, given that the majority are local - then my costs will be 33%. My profit is now 110 - 33 = 77.

This is just straightforward maths.

Dan


 

Vadim Kadyrov  Identity Verified
Ukraine
Local time: 07:31
Member (2011)
English to Russian
+ ...
SEPA and Brexit Oct 11, 2016

Michael Joseph Wdowiak Beijer wrote:

Another thing that is worrying me is what will happen with SEPA, IBAN transfers, etc.

Michael


This is exactly what worries me as well. I have a EUR account in a German bank, and what if Britain leaves this SEPA system? Will I still be able to get funds from there to this IBAN account in Germany, or will I have to switch to a SWIFT account (which is too troublesome for me)? I do have certain clients in the UK, actually.


 

Tom in London
United Kingdom
Local time: 05:31
Member (2008)
Italian to English
TOPIC STARTER
Assume Oct 11, 2016

For now, I suggest you assume that your accounts will be in completely separate countries between which there is no trade agreement other than the general WTO rules. I think it highly unlikely that the UK will be able to conclude new and better trade agreements with the EU or other countries in the 2 short years until 2019, when the UK will be OUT of the EU.

[Edited at 2016-10-11 13:53 GMT]


 

Heinrich Pesch  Identity Verified
Finland
Local time: 07:31
Member (2003)
Finnish to German
+ ...
Ask the Norwegians Oct 11, 2016

Britain's position in relation to the EU will be like Norway after the exit has taken place. So relax, I haven't seen Norwegians jumping into the sea because they are not in the EU.
2009 the Euro bought 1.60 USD. Now only 1.10. So my American client pays me more for the same word rate.


 

Anne Maclennan  Identity Verified
Local time: 06:31
Member (2010)
German to English
+ ...
Was any of this taken into account by the British government? Oct 11, 2016

It seems to me that the fall in the value of the GBP against the euro is symptomatic of the probable consequences of Brexit , as it seems to be being promulgated by the British government. Statements are made, albeit vague, about the position of EU citizens in Britain, about control of borders, about standing alone and controlling one's own business.

Britain has not stood alone for centuries. The Second World War was won by a three-cornered, uneasy alliance and Britain relied upon its former colonies, the then British Commonwealth of Nations for further manpower for the Armed Forces. The British population today has its origins from all over the world, including the ex-Cmmonwealth.

As a trading partner the Commonwealth became to all intents and purposes a part of history and now is a historical concept.

When it entered the EU, Britain managed to engineer all sorts of "exceptions" from various rules, while benefiting from advantges such as agricultural subsidies. It did not enter the Euro Zone.

Making the choice to live in any European country for a British citizen could be quite difficult with Brexit looming and after Brexit. I live and work in France, have done for some years and have no assets at all in Britain and am quite worried as to the future position of British citizens currently resident in EU countries.

It seeems that no real or sensible forethought as to economic or social conssequences has been given by the British pro-Brexit lobbyists or the British government, which may result from a hard-line Brexit. Is the government really so naive as to expect concesions from the EU, especially from France and Germany?


 

Robert Rietvelt  Identity Verified
Local time: 06:31
Member (2006)
Spanish to Dutch
+ ...
You are not the real looser Oct 11, 2016

Tom in London wrote:

Since Brexit, the British Pound has come close to 1:1 parity with the Euro. It is quite shocking that this has happened in less than a month.

I normally get paid in Euro so on paper it looks as if my income is going up, but of course the big picture is that for anyone trading across the EU, the British economy is crashing and the price of everything that's imported is going up - so I am not better off at all.

I'm glad I don't invoice in GBP because I would have to be slashing my rate.

Your thoughts?

[Edited at 2016-10-11 09:44 GMT]


The real loosers are (in a way you already said so) the British who get their salaries paid in Pounds. I don't expect they get a raise to compensate for Brexit.

Be happy with your Euros!


 

Tom in London
United Kingdom
Local time: 05:31
Member (2008)
Italian to English
TOPIC STARTER
Loser Oct 11, 2016

I'm a **loser** too for many reasons. The one that worries me the most is what all my EU friends are going to do, who currently live in the UK.

Financially I may not be a **loser** because I am paid in Euro but I do expect all of my living costs to increase significantly.

FOR EXAMPLE:

Fruit and vegetables will no longer be picked by underpaid Romanian and Polish workers but by Brits (once they have learned how to work and stop being lazy). They will demand the minimum wage, go on strike, etc. This will cause the price of food to increase.

[Edited at 2016-10-11 15:01 GMT]


 

Tom in London
United Kingdom
Local time: 05:31
Member (2008)
Italian to English
TOPIC STARTER
No. Oct 11, 2016

anne mac wrote:

Was any of this taken into account by the British government?



No, because they thought they would win (i.e. remain). The constant accusation against the British government is that they had NO exit plan because they assumed they wouldn't need one. So now they are having to make it up as they go along.


 
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