The pound to euro exchange rate plummeted to a one-week low yesterday following the announcement that Prime Minister Boris Johnson has put forward his third bid for a general election. The GBP has already been on a bumpy ride the last few weeks, with key decisions and Brexit debates shifting its position. Following a vote by MPs to extend Article 50, pushing the UK PM to consider a fresh election, the EU departure date could be slipping further away.
The Prime Minister announced that he had plans for a pre-Christmas election, saying in a letter to Labour leader Jeremy Corbyn: “An election on 12 December will allow a new Parliament and government to be in place by Christmas. If I win a majority in this election, we will then ratify the great new deal that I have negotiated, get Brexit done in January, and the country will move on.”
While Johnson has been set on leaving the EU on 31 October, his letter to Corbyn detailed a new course of action.
According to the BBC, he offered “one last chance” to Parliament to reassess his withdrawal agreement bill and “get Brexit done” by 6 November.
However, this revelation saw stock traders selling sterling off in anticipation of further uncertainty.
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Pound to euro exchange rate: The pound has fallen to a one-week low (Image: Getty Images)
The pound is currently trading at a rate of 1.1574 according to Bloomberg (Image: Getty Images)
The pound is currently trading at a rate of 1.1574 according to Bloomberg at the time of writing.
According to Michael Brown, Senior Market Analyst at Caxton FX: “Sterling was dragged to a one-week low on Thursday as political uncertainties mounted after PM Johnson announced his third bid for a general election since taking office as PM.
“The uncertainty that an election would cause, saw sterling sell-off, while market participants also continue to await the EU’s decision on the length of an Article 50 extension
“Focus will remain on politics today, namely whether the government can achieve the two-thirds Parliamentary majority needed for an early election, along with the EU’s decision on any Brexit delay.”
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Pound to euro exchange rate and Brexit
The last few weeks have seen a series of highs and lows for sterling, with a lean towards a deal being established, sending the pound soaring.
Meanwhile, the threat of a no-deal led to worrying lows.
In Europe, leaders have begun to grow weary of repeated debates, with French Prime Minister Emmanual Macron voicing his impatience.
French Foreign Minister Jean-Yves Le Drian told politicians: “We have been waiting three years for this decision. The British need to tell us as quickly as possible whether it’s a yes or a no.”
Despite this, Brexit could be set to change direction once more.
Pound to euro exchange rate: Boris Johnson has announced the potential for another election (Image: Getty Images)
Pound to euro exchange rate and your holiday
What does this all mean for Britons who are heading off on their half-term holidays this coming weekend?
The Post Office is currently offering an exchange rate of €1.1183 for £400 or more, or €1.1427 for £500 and over.
unfortunately, the more unpredictable the future of Brexit becomes, the more this may affect your travel money.
However, there are some things you can do to protect yourself.
Pound to euro exchange rate: Which European countries use the euro, and which use something else? (Image: NC)
Money Saving Expert Martin Lewis suggests opting for a credit card specifically overseas spending.
“If you normally spend abroad on debit or credit cards, while the providers get near-perfect rates, most add an up to three per cent ‘non-sterling exchange rate fee’ on top – meaning something that costs £100 costs you £103,” Lewis explained.
“Yet specialist overseas credit cards don’t add that fee, so you get the same near-perfect exchange rate as the providers – smashing bureau de change – in every country, every time you go away.
“Just ensure you pay the card off in full each month to minimise the interest.”