Are you ready for Brexit? In 2019, it’s going to be official and, although it’s dominating the news and your Facebook feed, there’s a reason why it’s taking up so much space. Whatever ends up happening, the results are likely to have an effect on our finances, and our lives.
It’s close to impossible to make predictions about Brexit that stay current. But what we can do is highlight some of the key areas that are most likely to be impacted. This should help you to know what to keep an eye on as we approach the end of the UK’s EU membership, on 29 March, 2019.
One of the key levers to pull in reaction to economic changes, upturns and downturns alike, is the adjusting of interest rates. The base rate, which is overseen by the Bank of England, has gone down once and up twice since the referendum - it currently sits at 0.75%. The rate going up makes borrowing more expensive, affecting those looking to take out a mortgage or those who already have one that isn’t fixed, but can benefit savers.
If the result of the Brexit negotiations leads to an economic boom or a slowdown, keep an eye on the interest rate and make sure you understand how it affects your personal situation.
The Bank of England has warned that in the event of a no deal, house prices could fall by as much 25% - 30%1. This was looking at a worst-case scenario, so it’s not something many are expecting. But anything that has a major effect on the economy will usually have an impact on house prices, so it’s something to watch.
The value of the pound has seemingly been quite responsive to the twists and turns of the Brexit negotiations. This means the worth of the pounds in your pocket could be strengthened or weakened based on the final deal.
If the pound’s value falls, you may find paying for things while on holiday more expensive. You could also end up getting less for your money on imported goods in the supermarket.
Flights to Europe from the UK, and vice versa, could be impacted by Brexit. The UK is currently a part of the EU’s single aviation market, which gives UK-registered airlines the right to take off in London, say, and land in Paris (and the same for EU-registered airlines going the other way). If there’s no new agreement reached, this could end abruptly.
If you have flights booked for after 29th March 2019 you should check with your airline to see if you are protected from any cancellations that could occur due to Brexit.
It’s worth keeping an eye on any changes relating to restrictions on travel to EU countries. Currently there’s freedom of movement between EU nations, so when you go to Spain, for example, you don’t need a visa.
It’s unlikely this will change for shorter stays2. The EU has said it will continue visa-free travel for UK citizens visiting for 90 days, if that’s reciprocated by the British government. But longer stays might be affected and the right to live and work in any EU country will almost certainly end.3
An area of interest to most of us will be the ways in which we are protected when we make purchases at home and abroad. If the UK leaves the EU with no deal, you may lose the rights you’re currently entitled to if you buy faulty products from a company based in an EU country.4