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By Daniel Wright, Sales Director of Foreign Currency Direct
Boris’ Conservative Party wins a comfortable majority, and the pound receives a boost as the currency markets are reassured by new Brexit certainty.
The pound has gained against its major counterparts on the interbank market this week, including hitting a 39-month high versus the euro, a 19-month high against the US dollar, and a near 42-month high versus the Australian dollar.
In part, this is because Prime Minister (PM) Boris Johnson’s Conservative Party has won a clear majority at the UK’s general election. As a result, it’s thought that PM Johnson will ratify the UK’s Brexit deal in the coming weeks, perhaps before Christmas, and get on with negotiating the UK’s future trade deal with the EU.
This has strengthened the pound, because the financial markets generally wish for Brexit to be finalised, with an agreement.
CONSERVATIVES WIN, CORBYN TO STEP DOWN, SWINSON LOSES SEAT
The Conservative Party has won 364 seats, a gain of 66 from the 2017 election, while the opposition Labour has lost 42 seats, to 203. There is one constituency yet to declare.
Acknowledging his win, PM Johnson said this morning that: “This one-nation Conservative government has been given a powerful new mandate to get Brexit done.”
Notably, PM Johnson’s majority is large enough that he can govern without depending on small groups of MPs, like the European Research Group or Northern Ireland’s Democratic Unionist Party.
It’s thought that this will contribute to a stable UK government next year, thereby benefiting the pound. Meanwhile, Labour leader Jeremy Corbyn has announced that he’ll resign, while Liberal Democrat leader Jo Swinson has lost her East Dunbartonshire constituency.
“NO DEAL” BREXIT TO BE AVOIDED, UK FACES TIGHT TRADE DEAL SCHEDULE
Turning to the future, sterling has risen, partly because it now looks virtually certain that the UK will avoid a “No Deal” Brexit. After all, prior to the election campaign, all of PM Johnson’s Conservative candidates promised to back the deal he’s negotiated with Brussels.
However, in 2020, sterling could be influenced, because the UK has just a year to negotiate its future trade deal with the EU. Traditionally, such trade deals take around six or seven years to sign.
This raises the prospect of the UK repeatedly extending its deadline, as we’ve seen with Brexit, or defaulting to trading with the EU on World Trade Organisation (WTO) terms. These developments may affect the pound in the foreseeable future.
UK ECONOMY CONTRACTS IN OCTOBER, NEXT WEEK PACKED
Turning to the UK economy, it’s been a downbeat week. The economy contracted by 0.1% in October, below forecasts for a 0.1% rise, while UK industrial production declined by 1.3% in October year-on-year. These bode ill for UK Gross Domestic Product (GDP) growth in Q4 2019, from October to December.
Meanwhile, next week will be packed, with the UK’s “flash” services sector data for this month, unemployment statistics for October, inflation for November, and the Bank of England’s interest rate decision. All these releases may affect sterling, alongside PM Johnson’s new government’s Brexit developments.
If you would like to know more about moving money across currencies as cost effectively as possible then please have a look at how Foreign Currency Direct can help you:
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…..or the importance of showing your house to potential buyers in the best way.
Last week I visited some vendors who are selling a house in a particularly attractive village in Lot et Garonne. I was there to discuss their marketing and as part of this we talked about the route THROUGH the house and the route TO the house estate agents had used when showing it to buyers. The owners thought the estate agents were doing it wrong and I agreed with them.
The house has two front doors – one opens into a courtyard garden which you then walk through to gain access to the house, the other front door opens directly onto a street at the other side of the house. At first glance you would assume that the best way to show the house is to use the door into the garden rather than walk straight in off the street – and this is what all of the estate agents had been doing.
The approach to a house is vital in setting the scene and if you enter the house via the garden front door you have to walk down a road on the edge of the beautiful old part of the village and you pass garages and recently build houses – all fine, but not what the village is known for.
If you enter the house via the street front door you walk through the beautiful central part of the village. A buyer would park their car in the village square bounded by a boulangerie, café and butcher (all very good) and a 12th century church renowned for its frescos. You then walk perhaps 200metres down a quiet road lined with very attractive old houses and the ancient covered market-place to reach your destination. This links the property psychologically with the old and beautiful part of the village rather than the more functional and more recent section at other side of the house. You can even see the boulangerie if you turn round and look back down the road once you reach the front door, which is great for selling the idea of a short walk to get your daily croissant.
You then conduct your viewing of the house. People usually leave a property by the door they initially came in through. This means that if you came in by the garden front door you exit that way using the garden (which is a small but very attractive paved courtyard) as a passage to and from the house, failing to capitalise on its own value. On the other hand, if you entered the house via the street front door you finish your viewing in the courtyard garden. If it is a warm day this is the ideal moment to sit down in the courtyard with your buyers. They then have the opportunity to imagine living in a house where you are only 2 minutes from the heart of a very pretty village yet you also have a private and well-designed courtyard garden to relax in.
As they leave the house again (via the street front door) you can point out the handy boulangerie which they can see at the end of the attractive road.
Carefully planning how you present your house is essential but it is amazing how few people – even estate agents as in this case – don’t think it through sufficiently. It can make all the difference between sale and no sale and helps a buyer because they are able to imagine the house as they would want to use it.
Incidentally – the house in question is definitely worth a look if you want a village house which is ready to move in to. It is in the really lovely riverside village of Allemans du Dropt. This is not far from Eymet and is convenient for Bergerac airport. You can read more about this well presented and well priced property here:
Here is a photographs of the River Dropt as it passes under the iconic bridge leading into the village:
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Save money and get your house onto the market ahead of the crowd.....
Our December promotion is now up and running - if you would like to advertise with us and you pay for one of our six month adverts in full between now and December 30th we will give you one extra month's advertising free.
Just open our "Advertise Your Property" page in the usual way, complete the property information form at the bottom of the page and send it to us. We will contact you to arrange payment - and give you that extra month's advertising - so if your advert starts to appear on December 15th then it would remain live until July 14th ensuring that your property is well publicised from the beginning of the year until, in this example, Bastille Day.
The offer applies to Gold, Silver and Bronze advertising packages which are paid for in full before December 30th.
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Sue has just started blogging for The Local Buzz - a free magazine serving the English speaking population of SW France. We advertise in the magazine regularly as it is extremely popular with visitors to the region as well as locals who like to keep in touch with what is going on in their department. You will see regular blogs from Sue, some of which will be linked to Le Blog on our own website and also to our sister gardening blog "Le Jardin Paysan" . You can see more about the magazine here via its website
And start reading the blog here:
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Sterling weakened against many major currencies this week, including the euro, US dollar and New Zealand dollar. In part, this is because the financial markets aren’t so confident that the UK and the EU will agree a Brexit deal in the foreseeable future as they were last week.
This is even though the UK Supreme Court ruled that Parliament can reconvene, as Prime Minister Boris Johnson’s decision to prorogue, or suspend, the legislative chamber was declared illegal.
Meanwhile, UK economic data this week was mixed, with the UK’s manufacturing sector slowing further in September, according to the CBI (Confederation of British Industry), although the UK’s far larger retail sector exceeded forecasts.
However, although the Supreme Court’s decision perhaps makes a ‘No Deal’ Brexit less likely, it’s simultaneously stalled last week’s Brexit progress.
First, this is because, to attend the opening of Parliament, PM Johnson had to fly from the United Nations General Assembly (UNGA) in New York. Here, Mr. Johnson was meeting EU leaders such as German Chancellor Angela Merkel and French President Emmanuel Macron. So, the PM has had to cancel or delay those meetings.
Second, what with Mr. Johnson the leader of a minority Conservative government, opposition MPs are in a strong position to control Parliament’s legislative agenda. For example, the opposition parties have refused to let Parliament go to recess, so that the Conservatives can hold their annual party conference, as is convention.
Moreover, opposition MPs continue to turn down Mr. Johnson’s calls for a general election, until a ‘No Deal’ Brexit is firmly off the table. So, it’s arguable that Mr. Johnson is being held hostage in No. 10 Downing Street, unable to govern, yet with limited powers to amend the situation. This adds to the lack of Brexit clarity.
In addition, if Mr. Johnson succeeds in negotiating a new Brexit deal, he’ll need to pass this through the House of Commons. However, as the PM is the leader of a minority government, he may struggle to do this.
The EU knows this, which could make Brussels less disposed to negotiate with Mr. Johnson in the first place, if they think he doesn’t have the Parliamentary support to pass the agreement. This seemingly leaves the UK’s Brexit situation in limbo this week, which has weakened the value of sterling.