British pound falls again and heads for parity against euro

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The Local/AFP - [email protected]
British pound falls again and heads for parity against euro
Photo: Money Sharma

The value of the pound has tumbled against the euro post-Brexit referendum, with some experts predicting the two currencies could end up at parity. The falling currency can have a huge impact on the lives of expats in the EU.


At the time of writing, the British pound is worth €1.17, down from around €1.40 before the June 23rd referendum that saw the majority of British voters opt to leave the EU.

This comes as a knock-on effect from the pound falling against the US dollar overnight, seeing lows that haven't been reached since 1985.

"The pound sterling recorded a bad performance after poor economic figures from the UK, including a stronger slowdown in services," Eric Viloria of Wells Fargo told the AFP news agency.

This drop has seen the value of the euro drop slightly against the dollar too, with one euro currently worth 1.1050 dollars.

Some analysts have suggested that the pound and the euro will eventually reach parity.

David Meier, an economist at Julius Baer, said he would "not be surprised" to see parity within the next 12 months.

"We believe that weakness will extend gradually beyond the first shock reaction, as the fundamental data will continuously turn pound-negative," he wrote in a research note soon after the referendum. 

Impacts of a weaker pound on Italy

As the value of the pound continues to tumble, many Brits will see their summer holiday budgets rise considerably.

Over three million Britons visit Italy every year,  with most of those trips made in the summer.

Tourism businesses, many operated by Brits themselves, fear the fall in currency may impact future bookings unless the value of the pound picks up.

Those working in operating tours or renting out property - popular jobs among Brits in France - are likely to see continued strains on their business if the pound keeps dropping.

Read more: British business owners in Italy feel Brexit jitters

The falling pound also spells bad news for any retirees living in Italy who depend on their UK pensions or investments for income.

And any Brits in the UK who have been planning to escape to Italy and buy a dream home in the country may have to rethink their plans.

Of course, the currency uncertainty brings good news as well, with those in Italy keen to visit the UK never having a better excuse to cross the channel and enjoy a cheap holiday.

Read more: The bright side of Brexit: the 'good news' for Brits in Italy

And of course for those selling their house in Italy to return to the UK , there may be no better time.

However, looking on the positive side, it was only a few years ago that the pound and the euro were almost level and life went on pretty much as normal. 


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