The UK has voted to leave the EU. While the consequences of this seismic decision are yet to be fully revealed, there is already speculation as to what it could mean for your money. We round-up the main opinions on Brexit and the impact on your finances.
Following last Thursday’s referendum, the pound plunged by a whopping 10%, the lowest level since 1985, and has yet to fully recover. Brian Milligan, personal finance reporter at the BBC, suggests a fallen pound is likely to make it more expensive to buy goods from other countries, which will, in turn, push up inflation.
It’s also suggested that a drop in the value of the pound could make holidaying in the EU more expensive, as accommodation will be priced in euros. David Cameron has also suggested that Brexit could add an extra £230 to the cost of a family holiday. This could lead to more people turning to help from payday loans and short term loans companies in order to help them out with their day-to-day bills.
It’s generally thought that a vote to leave the EU would cause house prices to fall. The International Monetary Fund has warned of “sharp drops” in house prices following a leave vote, and the National Association of Estate Agents has said properties in London could be among the hardest hit. Just today, shares in estate agent Foxtons dropped by 18%, with the firm citing uncertainty following Brexit.
Financial website This is Money says it’s possible “some bills” may shoot up on the back of Brexit, such as topping up the car with petrol, and energy bills. Household budgets could also be squeezed further by a rise in income tax rates, should this happen.
The prime minister has suggested the average cost of a mortgage could rise by as much as £1,000 a year as a result of Brexit. If interest rates rise, costs for landlords would go up, meaning a knock-on effect on renters.
The most recent move from the government has been to encourage confidence in the economy, saying the UK is in a “position of strength”. However, it could take 2 years for the UK to formally remove itself from the EU. There is much speculation of what’s to come but time, as ever, will tell.
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