'How will the pound fare against the Euro?' poll results/discussion

Poll between 15-22 Dec 08:

How will the pound fare against the Euro?


Last week the pound hit a record low against the Euro. Its official rate is currently hovering around the £1 buys €1.10 mark. So where do you think it’ll be in peak summer holiday time?

In July 09, £1 will buy...

A. Less than €0.70 6% (358 votes)
B. €0.70 - €0.79 4% (242 votes)
C. €0.80 - €0.89 11% (604 votes)
D. €0.90 - €0.99 21% (1175 votes)
E. €1.00 - €1.09 21% (1177 votes)
F. €1.10 - €1.19 14% (773 votes)
G. €1.20 - €1.29 15% (841 votes)
H. €1.30 - €1.39 5% (274 votes)
I. €1.40 - €1.49 2% (100 votes)
J. €1.50 - €1.59 1% (34 votes)
K. More than €1.60 1% (77 votes)

Voting has now closed, but you can still click 'post reply' to discuss below. Thanks :)
«134

Replies

  • All this euro stuff, is down to interest rates. Those who have savings are being penalised for having them with the low rates. No one will invest in Britain and as such the pound goes down.
    The whole monetary policy in this country is made on a fag packet by MP's who are recession proof. They have absolutely no idea how hard peolpe work to save and prepare for the future.
    2 other examples: this Christmas they will have their longest break for 10 years - 24 days! Also they penalise pensioners by stopping them getting the higher rate once they have savings over £6000. See www.telegraph.co.uk/justiceforpensioners
  • FrugaldomFrugaldom Forumite
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    Is there any guarantee that UK will keep the pound? Haven't we been expecting a level 1:1:1 across £, € and $? Then they could 'invent' a new global currency using the long-discussed microchip technology integrated with the microchipped ID cards, passports, cedit/debit cards, pets, cars and anything else that could be auto-swiped as we pass. Sounds fairly plausible to me, or maybe I'm just paranoid :D
    I reserve the right NOT to spend:
    The less I spend, the more I can afford!
  • Even if we *do* reach €1 = £1 (which is unlikely), it is irrelevant as to whether we can join the Euro - it is just a coincidence that the numbers happen to be the same.

    In fact, if we were ever to join, the rate would need to be fixed much higher, because a weak Pound hurts European exporters too much.

    We would also need to stop borrowing more than 3% of our GDP which is not exactly likely at the moment!

    Anyone buying Euros at the moment should shop around as much as possible - do not use airport kiosks for cash, and do not use banks for larger transfers - better rates are available in both cases.
    No Unapproved or Personal links in signatures please - FT3
  • Here is a question - I need to pay for timeshare management fee in Euros before the end of January 2009 - should I pay the fee now or see what happens with the Euro??
    Well lets see - I dip in and out of MSE all the time but I still come back - have done since 2007!!!

    2022 - Fashion on a ration - 9/66
  • ysatissysatiss Forumite
    61 Posts
    Part of the Furniture Combo Breaker
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    My other half and I are going to mainland Europe for 3 months at the start of January (extended holiday). I've got my euros already but he hasn't! I think our holiday is getting shorter every time the pound goes down a bit more... And I told him when it went below 1.2 to wait a bit longer as it should go back up.
    Eek!
  • Here is a question - I need to pay for timeshare management fee in Euros before the end of January 2009 - should I pay the fee now or see what happens with the Euro??

    Depends if you want to risk it... at the moment the Pound is being talked down and with another likely interest rate cut in the UK early Jan I would be tempted to secure your rate in case it gets any worse... at least you know what you have to pay then.

    But you never know!
    No Unapproved or Personal links in signatures please - FT3
  • Coveredinbees!!!!Coveredinbees!!!! Forumite
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    Trouble is the country is being run by an idiot and it's finally caught up with us.
    Nothing to see here, move along.
  • > We would also need to stop borrowing more than 3% of our GDP which is not exactly likely at the moment!

    Would we, though? I know it's in the Maastricht treaty, but the EU can be quite flexible with fiscal rules when it suits them. It would be a bit rich of them to start demanding the UK meets all of the convergence criteria during a recess, when several Eurozone countries are borrowing huge amounts right now and some, like Greece, have broken those rules pretty much every year since they joined the Euro.

    Britain's overall public debt as a percentage of GDP is lower than that of eight of the Eurozone countries. Even if debt does increase to 60-odd%, as some forecasts have it, it'll still be less that that of Italy, Belgium, or Germany. (source: CIA World Factbook)
  • There are several things that cause currencies to fluctuate:

    Interest rates, Inflation, Balance of Trade, Economic Growth, Money Market Speculators, Government Budget Deficits/Surpluses.

    The UK is indeed talking about lowering the interest rates which would, in theory, drive down the value of the Pound, but the US rate is incredibly low, and the EU can also lower rates which makes it difficult for investors to pick one nation over another to invest their money.

    Britain has a lot of debt, but so does the USA which now stands at over 10 Trillion Dollars and growing.

    The problem with predicting currency fluctuations using past economic models is that, in our ever changing world, those past models are changing and models that worked twenty years ago are not working the same way today.

    This is one reason why many economists are predicting that Gordon Brown's desire to emulate the Keynesian economic model by spending his way out of this recession will only create more debt and place a greater burden on the next government in the form of higher taxation, or spending now and paying later.

    One of the principles of Keynesian Economics put forward by the founder John Maynard Keynes, was to lower interest rates and invest public money into the infrastructure to boost growth and 'slingshot' the nation out of a recession by forcing the machine of commerce into motion again.

    However, Keynes published his ideas back in 1936 right after the great depression, and certainly before the technology age when money could be instantly transferred from one account to another in seconds, or when banks in New York could sell sub-prime mortgages to other banks around the world with the touch of a button.

    The USA and UK economies were also very different back then than they are today. In 1936, British and American industry supplied the majority of the world's goods and services, but today, China, South America and Japan control most of the manufacturing.

    What this means is that the UK government cannot rely on a British taxpaying job pool to supply all this tax revenue to slingshot us out of the recession since most manufacturing jobs are located in China. Now we have a world economy and not just a British economy, hence the economic model has changed.
  • mcgazz wrote: »
    >
    Britain's overall public debt as a percentage of GDP is lower than that of eight of the Eurozone countries. Even if debt does increase to 60-odd%, as some forecasts have it, it'll still be less that that of Italy, Belgium, or Germany. (source: CIA World Factbook)

    PFI ? (And all 4 of us have unfunded inflation protected pension commitments).
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