Economist forecasts collapse of the Pound Sterling

[John50]

On the Sky business channel today:

IF the European Central Bank declines to cut interest rates below 2.5% - further interest rate cuts are now seen as a poor way of propping up the economy by many ECB economists

IF the Bank of England cut again in January reducing from 2% to a lower level the UK bank rate - what else can they do they say ?

Then expect the Pound Sterling to collapse below one Euro to perhaps a Euro costing £1.10 to £1.20 to buy.

Then expect a mass exodus of people back to UK soup kitchens, relatives etc.

Christmas, New Year ? Forget it.

£1 = 1.112 Euros

[yllig]

If you read some of the newspapers there are plenty of articles that say different.

David Green who I think was something to do with the Bank of England was interviewed last night and he said that the Bank of England would have to intervene eventually as it was giving the UK an unfair business advantage against other countries even though it was good for exports here it was not good for imports which the UK does a hell of a lot of.

There was an article today in one of the proper papers that said back to 75p rate against the euro next year and 1.60 to the dollar.

I am not going to panic yet a while although almost there!!!

[Warrior]

There was an article today in one of the proper papers that said back to 75p rate against the euro next year and 1.60 to the dollar.

I don´t think talking up the exchange rate is quite as easy as estate agents talking up house prices - on what crystal balls do they base this exciting info.

[yllig]

I suppose the same crystal ball as the people who say it is going to be parity within the next few months.

Then some newspapers say that there may not be another cut in rates in January as this will lower the £ even more.

I am just trying to keep positive really. We have no income only savings that will fast deteriorate in the next few years.

Our plans for our life in Spain are disappearing to dust now unless things do improve like a lot of people who based their budgeted living expenses on 1.40 and then 1.25 exchange rate. This now means no more going out, no more unnecessary journeys, certainly no holidays or travelling around Spain and cutting back on anything that is not absolutely necessary.

We are now thinking about going back in a few years while we do still have some capital left.

The only good thing about £ to the Euro is that money from sales of properties will be worth more now if people do go back to the UK and we can afford to drop the sale price down. £124,000 purchase price - 179,000 euros. Can now ask 125,000 euros/£ and not lose out. A nice thought.

[Warrior]

The only good thing about £ to the Euro is that money from sales of properties will be worth more now if people do go back to the UK and we can afford to drop the sale price down. £124,000 purchase price - 179,000 euros. Can now ask 125,000 euros/£ and not lose out. A nice thought.

Yes, a nice thought as long as you can find a purchaser......where are they?
The Banks will soon own all the property in Spain through repossessions.

[golfer2536]

But who will buy all the house's that expats want to leave in spain?? there is no money around for anybody to spend at this time! People who want to retire to spain and live off pensions, can no longer do it due to pound/euro rate.
I am sorry but you are still in a no win situation. I am desperate to retire and live in spain but need the pound to gain some strength first, other wise it will not happen.

[yllig]

We live in a small village on a small development with lots of nationalities including Spanish.

We have found that the odd property is selling here as long as it is a realistic price. Its a lovely village with fiestas, processions, picnics, concerts, christmas market, carol concert, films in the summer, open air bar etc etc.

Loads of spanish visit the village and the very popular restaurant here so I am hopeful if we are prepared to knock the price down which we would be able to if the £ became the Euro. I think a 54000 euro drop on a property in that price range is enough to tempt someone.

The people who are not selling in the village are being very unrealistic.

However, there may be even more properties on the market if people have to come back to the UK who cannot manage. I think a lot of people are going to have a shock.

We can just about manage if parity happens - wont be much of a life and our capital will drop down somewhat but at least we can stay here. Whether we think the sun is worth it taking that into account is another matter

There is still building going on. Our builders were very quick to react and moved to Majorca, Brazil, Mexico etc. They are building detached villas with pools over near to Elche and they are selling well. I think the days of big urbs are finished now. Small developments of individual villas in the higher price range are still going ok. There will always be people who this does not affect. We know people here who are not affected.

I think you are wise to make that decision. It will soon be cheaper to live in the UK. Some of our bills are higher anyway. Internet, car insurance, household insurance, were all more expensive than the UK even before this drop in the £. Electricity is actually more for us here in a smaller property than the UK before we left.

[benimar_col]

£ to the € - a new low

£1 is only worth €1.11 this evening, this excludes tourists rates which take it down around €1.075 - €1.085 if your lucky

i cannot believe its going to be worth more than the pound in the next few days, scandalous

[yllig]

It actually went up to 1.125 earlier today. It was 1.118 on Friday so has hardly dropped today at all. Its 1.116 at the moment.

The £ against the $ has gone up by quite a bit today after a low of 1.45 last week, presumably because of the expected drop in interest rates by the US Federal Reserve tomorrow to 0%.

Perhaps that will take the heat off sterling for a bit.

Dare we hope that sterling has bottomed out for a while?

[benimar_col]

If you read some of the newspapers there are plenty of articles that say different.

David Green who I think was something to do with the Bank of England was interviewed last night and he said that the Bank of England would have to intervene eventually as it was giving the UK an unfair business advantage against other countries even though it was good for exports here it was not good for imports which the UK does a hell of a lot of.

There was an article today in one of the proper papers that said back to 75p rate against the euro next year and 1.60 to the dollar.

I am not going to panic yet a while although almost there!!!

the only bit of good news this Christmas regarding the exchange rate, how true this is only time will tell