Chancellor shocks market with £45bn tax cut causing the Pound to tumble
The Pound has taken a beating this week following the announcement of the government's tax cut plans.
- Chancellor Kwasi Kwarteng announces tax cuts to the tune of £45bn in the mini-budget.
- The pound has fallen nearly 3% against the Euro and 4.5% against the US Dollar.
- Banks have suspended mortgage deals.
- Bank of England steps in to try and calm markets. They will buy government bonds on a temporary basis.
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What does it all mean in real terms for those buying holiday homes overseas or businesses importing goods from overseas?
€250,000 is now £6,270 more expensive
$250,000 is now £10,553 more expensive
In the short term, if you have any immediate payments to make, it is worthwhile considering fixing the rate and securing the price of your Euros or monitoring the rate to make sure the Pound doesn’t weaken further.
In the longer term, a recession is expected and less likely to cause a shock to the market, and the Euro could weaken, as the Eurozone are in an equally bad position. However, they were behind on their interest rate hikes and slow to tackle inflation compared with the UK.
Spartan FX can help you to:
- Buying your currency in advance and hold it free of charge on your account.
- Fix the rate with a 10% deposit; this doesn’t use up all your cash flow until you need the money.
- Monitor the rate – notify you of any improvements or, more importantly, any further weakening. Helping to keep your budgets on track.