The Pound continues to edge lower against the Euro as markets prepare themselves for Philip Hammond’s first Autumn statement at around 12:30pm today. Some of the Chancellor’s suggestions have already been highlighted in the media and include;
- A change to the taper rate in which Universal credits can be withdrawn
- A crack down on letting fees for those renting
- £1.4bn injection to build 40,000 more affordable homes
- Minimum wage to rise to £7.50
Hammond’s proposals are designed to help JAM’s (Just about managing) families who have already experienced the pinch as a result of Brexit. He is also expected to announce funding for new railways and roads to help tackle congestion.
Whilst these announcements could benefit some of the poorest people in the UK, the Chancellor still faces a huge financial hole following June’s vote.
UK households to be £1.2tn worse off
Credit Suisse has reported that UK households could be £1.2tn worse off as a direct result of Brexit, the fall in Sterling’s has had a negative impact on 400,000 millionaires bringing the average wealth per adult down to $289,000 since the end of June. Furthermore, the UK also faces a £100bn financial hole which needs to be replaced once the UK loses EU subsidiaries.
These findings contradict claims made by the Leave campaign, who promised extra funding for the NHS from savings made to the EU budget.
It remains unclear as to what the new Chancellor wants to achieve from his latest statement, as once the UK begins its withdrawal from the EU as early as next year, the Pound’s value could fall further presenting fresh concerns for already struggling families.
Pound strength could still emerge in the weeks ahead
The initial release of Hammond’s statement has prompted some losses for Sterling exchange rates, although Brexit remains a concern for markets the legalities surrounding the vote throw into doubt as to whether Theresa May will manage to invoke Article 50 in March, or whether her version of Brexit will be achievable. The Court case if unsuccessful in December, would allow Parliament to scrutise any plans suggested by the Tory Government, preventing May from triggering Article 50 as promised by March 2017. Furthermore, it was reported on Monday that the ECJ – Europe’s Court of Justice, many have the final say on any Brexit related deal.
If the UK steers away from a complete removal from the customs union either through choice or legal necessity, the Pound could improve as market confidence is restored. Much of this depends on the outcome of the December Court Hearing.
Current exchange rates
The below table provides current exchange rates which are accurate at the time of writing.
|Currency Pair||Current Interbank Exchange Rates|
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