Article Image 26472

How could the EU referendum affect international money transfer?

Having promised a referendum on EU membership by 2017, David Cameron's recently announced that he's planning to bring the vote forward to 2016. That means those with financial interests in the EU will need to plan for the future a little earlier than anticipated. To help you get a sense of the consequences for international money transfer, whichever way the vote goes, we've put together this quick guide.  

If the UK stays…

We’ve already seen what a vote for the status quo can do – the pound surged in value following the election of a Conservative majority government. So it's tempting to predict another rise in value of the pound should the UK opt to stay.

That said, based on the evidence, any uptick is unlikely to be that significant. As Bank of England governor Mark Carney notes, businesses aren’t acting on current uncertainty: “they are continuing to invest, they are continuing to hire”. That means the pound could stay strong in spite of the potential for an EU exit, and remain strong after a vote in favour of the union, with little change.

So at a fundamental level, a pro-EU vote is likely to lead to a stable pound. For international money transfer, this is positive – exchange rates will be more predictable, and sending money from the UK overseas will be cheaper. 

If the UK goes…

The EU’s 500 million consumers make up the largest market in the world. Quantifying the exact impact leaving the EU would have on the UK and the pound is difficult, but the common consensus is that it would be bad news for the economy. 

50% of Britain’s trade flows are with the EU, and a study by Bertelsmann Stiftung and the ifo Institute warns that the UK could lose as much as 14% (£215bn) of GDP following a split from Europe. This would, in turn, worsen the UK's credit rating, a move that typically weakens currencies.

So again, looking at this from a fundamental level, an anti-EU vote is likely to lead to a weak, unstable pound. This could make holidays abroad, imported goods and UK mortgages on overseas properties more expensive for Brits. Foreign exchange brokers can help you prepare for this, however, with forward contracts and fixed payment plans.

To start looking into the right solution for you, whatever the outcome, you can use our free currency comparison tool.

Comparison tool

Sending Currency
Buying Currency
Send USD Receive

Latest Articles

Felicity Liebmann

Used your service last week to get travel money from ICE and it all worked beautifully. Very efficient and easy, the cash arrived when it was due so there was no hanging about waiting or anxiety about it not arriving when promised.

R.H

I am extremely impressed with the Investec currency exchange team service levels, they are fast and efficient. Excellent trading rates and straight talking, what more do you need.
uae

International Money Transfers for Individuals

If you are purchasing overseas property, paying tuition fees, receiving your pensions or for whatever reason, transferring money internationally can be a costly. We compare the services on offer for the amount you wish to send and save you money by finding the best exchange rates and lowest fees.

regular overseas payments

MAKING REGULAR OVERSEAS PAYMENTS FOR YOUR BUSINESS

If your business makes regular overseas payments, the costs associated with fees and exchange rates can mount up. We show you the best methods for saving money and taking advantage of superior exchange rates. Demonstrate the considerable savings your business can make over time.

Market Insights

Sign up for our newsletter.

Thank You for subscribing to our Newsletter

You have successfully signed up to our Newsletter