As the referendum to decide whether the United Kingdom would remain in the European Union or not drew to a close, columnists attempted to deduce how this would affect Sterling. Another question was how it would affect people changing currencies. These have taken divergent paths. Patrick Brusnahan writes
Sending money from the UK has shown itself to be a resilient industry post-referendum. While there was a slight stagnation between August and December 2016, the average money transfer value increased by 14% from January to May of 2017.
This is according to Small World FS, a money transfer operator that analysed 2.4 million UK transactions.
It found that the Monday before the vote on Thursday 23 June 2016, the amount of money sent abroad was more than twice as high (a 120% increase) than it was on an average Monday in the previous eight weeks.
In addition, between Monday and Wednesday of that week, 70% more money was sent abroad than usual. This highlights the fact that people who regularly send money home show signs of risk-aversion.
After the vote, there was a slowdown. While June 2016 saw rates of money transfer 50% higher than in January of the same year, July sharply fell to just 17% higher than January. August was only 18% higher, and October and November lower still.
While the week of the referendum results saw the average transaction value hit £406, the following week dropped to £307. The week after that saw a more average transaction value of £275.
However, 2017 has seen this stabilise. The average transaction value in January was £379, a great deal higher than the £309 in July 2016. In 2017, the average transaction value in a month has not dropped below £370.
Brexit money: a good rate?
While money transfer rates have recovered, the same cannot quite be said about the Sterling. Over the last two years, the price for €1000 has increased nearly £200, from approximately £700 to £879.
The value of £1 has not exceeded €1.21 in 2017. In comparison, the pre-EU referendum level was €1.30 and it was €1.43 two years ago.
Will this affect money transfer rates? Research agency Populus found that 80% were likely to postpone a transfer given a bad exchange rate. It doesn’t look good.