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British expats swap sterling for local currencies
British expats swap sterling for local currencies
| Published: | 8 Mar at 9 AM |
Brits who have chosen to move abroad are swapping their savings from sterling to the local currency as the pound continues to weaken against the dollar and the euro. A recent survey by Lloyds TSB International has revealed that the number of British expats holding money in sterling has halved since September 2011 to just 13 per cent.
Lloyds TSB senior economics adviser, Andrew Pipe, said the drop in the value of the pound against the euro was more to do with optimism about the single currency rather than pessimism about the economic situation in the UK.
He explained that while there was a risk that the eurozone could splinter causing redenomination expats felt it was safer to keep their money in sterling. However, the European Central Bank has since vowed to do all it takes to make sure the euro remains and so those living abroad are now confident to swap from the pound to the euro and other currencies.
The base rate at the Bank of England has hit an all-time low, meaning that interest rates on sterling accounts are also low compared with other countries. The BoE base rate is 0.5 per cent compared to the Reserve Bank of Australia’s cash rate of 3 per cent and the Reserve Bank of New Zealand’s 2.5 per cent.
It is therefore not surprising that those who have moved abroad are looking to the local currency to offer a better rate of return on their savings.
Lloyds TSB senior economics adviser, Andrew Pipe, said the drop in the value of the pound against the euro was more to do with optimism about the single currency rather than pessimism about the economic situation in the UK.
He explained that while there was a risk that the eurozone could splinter causing redenomination expats felt it was safer to keep their money in sterling. However, the European Central Bank has since vowed to do all it takes to make sure the euro remains and so those living abroad are now confident to swap from the pound to the euro and other currencies.
The base rate at the Bank of England has hit an all-time low, meaning that interest rates on sterling accounts are also low compared with other countries. The BoE base rate is 0.5 per cent compared to the Reserve Bank of Australia’s cash rate of 3 per cent and the Reserve Bank of New Zealand’s 2.5 per cent.
It is therefore not surprising that those who have moved abroad are looking to the local currency to offer a better rate of return on their savings.
