How Brexit Will Affect Your Money ?

By | June 30, 2016

After voting in the EU referendum, one of the things you need to know is how Brexit will affect your money. Is your mortgage payment going to be higher or lower than it was before the move was taken? Are investments, pensions or other forms of payments going to rise or fall? What is likely to happen to the value of the sterling pound? How is going to affect the international money transfer industry?

international money transfer

According to AA, family fuel bills are likely to rise by £500 annually. Amber Rudd, the current Energy Secretary claims that the costs of energy will soar in the coming months as a result of the vote. The sterling pound is projected to collapse by 20% as per Goldman Sachs, one of the most prominent analysts. Goldman adds that the stock market will slide by 30% in the coming months. What is the reaction of the sterling pound and FTSE 100 after the vote? There is no doubt that the UK market has been dominated by large internationally owned companies.

The performance of these companies is not linked to the issues faced by the UK nation. The Chinese economy, interest rates of the US and oil price are considered to more significant. If you prefer investing on the stock market, then you must be prepared for volatility. The FTSE of the leading 100 companies in the UK rose from 5500 in the month of February and now it is around 6096. However, most investors are very cautious. A good percentage of them would rather go for lower risk investments even if it means making less at the end of the day.

On the other hand, different economists are very optimistic that the interest rates will remain on hold until the middle of the year 2017. After that, the will change. This is regardless of the UK decision to quit or remain in the European Union. The value of the sterling has reduced by 12.5% when compared to the Euro and 6.8% against the US dollar. It was also established that the sterling reduced by 11.5 % after the debate kicked off.

The trade in the United Kingdom will be affected for a short term. This is because the nation will need to embark on the process of negotiating deals with other countries within its region. In addition, the cost of foreign holidays will increase. This will make the number of persons going for foreign tours during the holidays to reduce as well. Investors will also be forced to change their investment portfolio since diversification is key when it comes to wealth creation.