Did the UK leaving the Euro have an impact on the currency?

UK_leaves_EuroOn June 23 2016, the British public voted to leave the European Union, which in turn has been coined the “Brexit Movement”. Most experts, even my good friend Tony at droneworxs.com.au, predicted tough times for the U.K. currency following the vote to leave, and extreme cases of the collapse of the British pound against a temporary fall against the euro were among speculation. As the pound dropped following the Brexit vote, product exports from Britain to other countries rose 3.4% between June and July. As a drastic comparison, as the Brexit Movement developed, exports to the European Movement were made cheaper due to the pound’s decline, and rose by 9.1% according to official figures. In the aftermath of the vote to leave the Eurozone, the British Pound fell to over a 30 year low in comparison to the dollar. Now stabilised however, the British Pound is still below pre-vote levels but is set to even out once again. Below is an outline of the ways the Brexit Movement has affected the British Pound, and what it means for its people:

  • Foreign holidays are set to become more expensive – The British Pound is now less valuable abroad, and so holidays overseas will cost more.
  • An increase in inflation – a lower British Pound means that imports costs will increase and Britain may see the return of inflation – a term used to describe the increase in cost on a wide scale. Initially inflation may seem subtle, affecting things like alcohol production, clothing items and goods, but will eventually spread to larger items like cars, mortgages, homes and loans. Similarly, interest rates could increase.

The future of the euro

The future of the Euro is by no means certain. Following the 2010 Euro crisis, which saw Eurozone members suffer lasting economic damage and depression, Europe is in a state of political dilemma. After pledging billions of Euros into financial support to a selection of counties, the fundamental resolution has still not been found.

Where Euro currency is used

The Euro is the official currency used to trade in 19 of the 28 member states of the European Union, also known as the Eurozone.

These countries are listed as follows:

  • Austria
  • Greece
  • Ireland
  • the Netherlands
  • Belgiumcountries_europe_map
  • Portugal
  • Cyprus
  • Italy
  • Slovakia
  • Estonia
  • Latvia
  • Slovenia
  • Finland
  • Lithuania
  • Spain
  • France
  • Luxembourg
  • Germany
  • Malta 

     
    Now the Eurozone is financially amalgamated, the Euro eliminated exchange rate instability and the costs associated with it, and introduced easy access to a large and financially integrated European market. However, drawbacks were identified in the Euro during the financial crisis of 2007-2008. During this time, some Eurozone members suffered more than others, however due to the lack of economic independence, the countries were unable to set monetary policies to best aid in their own financial recoveries. It is now up to the evolution of EU policies to address the financial issues of individual nations under the Euro that will best decide the future of the Euro.

The birth of Euro currency.

Euros Project_The beginningAfter much negotiation, with a particular focus on Great Britain, the Euro was officially adopted on 16 December 1995.

Presented to global financial markets as an accounting currency on 1 January 1999, the Euro was actually ideated back in the 1960s.

In 2002,  just five years after the introduction to the Euro, notes and coins began to disseminate throughout Europe. It quickly grew popular through the continent, and began to replace former currencies used in the EU.

Exciting Times Ahead

This is the start to our website and over the coming days and weeks, we will be working hard to get this site up and running.

Please come back and visit us so you can learn about who we are and what we do……..until then, take care!