It’s been a dismal week for weather in the UK, and one in which the so-called “dismal science”, economics, has been very much to the fore too. Future economists will have fun analysing the results of a decade of austerity and then, judging by the election promises so far, a period of huge expenditure.
We had a far from dismal weekend ourselves, at the Your Overseas Home show in Epsom. There was a huge turnout of people looking to buy property overseas – by far the busiest of the 10-or-so shows of the past three years. Could it be that people are “just getting it done”? Their future lives abroad that is. They could wait and see how Brexit works out in the long run, but then as our – arguably – greatest economist said, “In the long run we’re all dead”.
The pound had a pretty good week too, coming to within a whisker of its highest rate since the spring, then settling to a mere 2.5% above the average for GBPEUR this year. Today’s rate would be a saving of around £11,000 on a €150,000 property on the Mediterranean compared to if you had bought in the middle of the summer.
This week we have some important economic data releases coming up, that will help us see how the UK is weathering business’s and the public’s pre-Brexit jitters – the UK’s GDP this morning, German GDP on Thursday and our own inflation figures on Wednesday.
If I was buying abroad, or making any major transaction throughout 2020, I would definitely be taking out a forward contract at today’s excellent rate. It’s just not worth betting your future on the currency markets, because, to quote Keynes again, “The market can stay irrational longer than you can stay solvent.”
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