Expats advised to remit as sterling struggles

Published:  30 Jul at 6 PM
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British expats living and working overseas are being urged to remit as the pound sterling is undervalued.

As fears of a hard Brexit and its devastating effect on the UK’s economy increase, expats working overseas are being urged to remit before it’s too late. According to analysts, sterling’s instability will continue over the eight months left before Brexit kicks in, with the chance of a no-deal becoming ever more likely. Since mid-April, when the pound was at its highest rate since the 2016 referendum, many factors are combining to put pressure on the currency, now believed to be undervalued and unstable.

British consumer spending is slowing, wage growth is weak and inflationary pressures have declined. However, the main cause of sterling’s fall is the possibility of a hard or disorderly Brexit caused by the current political chaos.Other experts believe the pound sterling is now an unpredictable currency with negative political announcements, its main driver at present, being joined by monetary policy decisions as well as economic data. USA interest rate hikes, the Trump trade war and the currency war between China and the USA are also negative effects and, along with other important factors, are expected to drive the pound sterling.

Those most likely to be affected are expatriates working overseas and British retirees receiving their pound sterling pensions in home country bank accounts and transferring them to overseas foreign currency accounts. For expats holding foreign currency accounts but who still have accounts in their home countries or offshore accounts in sterling, it’s a gamble whether to remit now or wait until next March when the pound is expected to fall further, especially if the UK crashes out of the EU without an agreement. The math behind the decision is easy, as the lower the sterling exchange rate the more pounds you get for your foreign currency, but the next gamble is how much further will sterling fall should a hard Brexit wreck the British economy.
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