Since the Brexit vote last year, the British Pound has taken a beating from every single currency in use amongst the world’s sixteen top economies (according to leading research firm Caxton). Happily for British expats out in Dubai, the UAE dirham has put on 15% – which makes going home for Christmas that little less daunting!
Since Brexit, the British Pound is down 11% on the US dollar and 15% on the Euro, as well as 20% weaker on the South African rand and an average of 17% weaker against Brics nations (Brazil, Russia, India, China and South Africa).
Er … Brexit?
As a British expat in the UAE, you may have forgotten about Brexit by now. On June 23rd 2016, the British population voted to leave the EU. Under Article 50 of the Treaty of Lisbon, Britain is scheduled to be out by the end of March 2019. Right now, the situation back home is that UK Prime Minister Theresa May is set to resume ongoing talks with the EU on August 28th 2017.
(For a Brexit recap check out Holborn Asset’s review of the ins and outs of Article 50 and all 6 options for Hard and Soft Brexit.)
What’s happened with the UAE dirham and the British Pound since Brexit?
The UAE dirham has put on 15% over the Pound since Brexit. On the day of Brexit, 23rd June 2016 you could get 18.3p for a dirham. Seven months later on 16th January 2017, the rate peaked in favour of the dirham at 22.6p per dh. In mid to late August 2017, you’re looking at 21.1p per dirham.
Has the British Pound done well against any currencies after Brexit?
Yes. The Pound has done well in Egypt and in Turkey. In Egypt, Sterling has put on more than 70% against the Egyptian Pound (which floated in November 2016 on the international market and has since heavily suffered). Against the Turkish Lira, the Pound has put on 8% as a result of Turkey’s currency being weakened by ongoing political turmoil.
The British Pound since Brexit: verdict
As The Telegraph observes, “the pound is expected to continue to fluctuate in response to news regarding the Brexit process and deal.” And then some! Fear of something going wrong with Brexit is making things go wrong with the currency.
For Brits, it means holidays have shot up in value. Ironically, the weak Pound has meant that many Brits have stayed home for their holidays, whilst a record 10.75m tourists visited the UK between April and June – a boost of 20% in Q2 – to take advantage of the currency situation. A 29% leap in visits from the US has been reported.
For British expats in the UAE, a weak pound is certainly not good news if investments are held in the UK. But paying UK school fees and mortgages in 2017/18 certainly becomes a lot easier for UK expats in the UAE with a 15% bump in the relative value of the UAE dirham since Brexit.