With the outcome of the EU Referendum still unknown when writing last week's Finance Fridays post I gave you some general tips about travel money. This week's post has been a lot harder to write not because of any personal political opinion but simply the financial position of the country has changed so much on day-to-day basis. As I write this now the nominations for the Conservative party leadership have just been confirmed and with that the news that Boris Johnson has withdrawn. In order to try and make sense of all of this from a financial perspective I'm done a very British thing and made a cup of tea while I think things over.
FTSE 100 – It went crashing to the floor when the markets opened on Friday morning and continued to so at the start of this week. However since share prices dropped so low the bull traders have been in snapping up bargain stocks causing the FTSE 100 to recover many of its losses. Although speculation plays a big part in share prices it's difficult to predict the future and how the market will react when the real process of Brexit starts.
Currency – Again the value of pound against the US dollar and the euro dropped like a stone on Friday morning. Bad news for travellers and even worse if you want to import goods into the UK as they will now cost more.
Fuel – As the price of oil is stated in US dollars the cost of petrol is sure to go up at least in the short term. If transporting goods around the country costs more then prices of goods and in particular food are likely to go up. For individuals needing to use their cars they will either need to absorb the cost somehow or think about car sharing and using alternative transport.
Airport expansion – Business leaders are dismayed that plans for a further airport expansion at either Gatwick or Heathrow have been delayed for the moment. The decision will be left to the new prime minister to make – something else to add to the ever growing list. Good news though if you live under the flight path.
Before last Thursday's vote it seemed that if the vote to leave the EU was successful then the process to start leaving the EU would happen immediately. In the days afterwards nobody it seems wants to rush things in the UK even though many of the other EU countries are pushing for it. Whoever does become prime minister will take on the mantle of taking the UK out of the EU and everything else it entails – what a legacy to content with before they are even elected. Such is that task that it may drag on for ages and eventually be swept under a very big carpet – the result of the EU Referendum was never legally binding but merely advisory. Also in order to trigger Article 50 of the Lisbon Treaty a bill will have to passed through Parliament and many MPs have already stated they will vote against it. There is a real possibility it may never happen.
On Monday morning HMRC had to put a recorded message on its telephone helpline after an unprecedented number of calls. It stated, “Everything is continuing as normal. No laws have changed.” With that my advice is
KEEP CALM AND CARRY ON!
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