British expats in France – They’re staying put In the wake of the global financial crisis, Europe has an increasing number of British expats who are looking to move back to the UK. However, France has a more resilient breed, according to currency specialist Moneycorp. In a survey of 250 British expats across Europe, Moneycorp found that 70% are considering moving back to the UK – or will have to consider it soon. In a year which has seen the euro trading between 1.02 and 1.20, less favourable sterling rates have largely contributed to this statistic. However, only 17% of people across Europe claim that the fall in the value of sterling has had no impact on them. In France, British expats seem a little more resilient to the weaker pound. Over a quarter (29%) say they haven’t been affected by it at all – and the French property market is considered to be a contributing factor. Research revealed that 21% of British expats in France have seen an increase in property demand and rental values there – compared with an average increase of just 11% in Germany, Italy and Spain. As a result, expats in France have been coping well financially. France has a more stable real estate market than Britain. It relies mainly on fixed rate mortgages coupled with cautious banking practices, making the French market less prone to sharp upturns or downturns. The French economy was the first out of recession (along with Germany), thanks to 0.3% GDP growth in both the second and third quarters. These encouraging figures could explain why British expats are less likely to return to the UK. At the moment, GBPEUR is trading at around 1.10 – with the UK and the eurozone experiencing slightly worsening economic conditions over the last few weeks. This has led to a fairly static pound/euro rate of exchange, whilst the eagerly awaited fourth quarter economic growth figures will likely provide the guidance for near-term direction. Last Thursday's monetary policy meeting at the European Central Bank (ECB) produced no surprises for interest rates either: the key ‘refinancing rate’ will remain at 1% for an eighth month. But there was more to it than that. ECB president, Jean-Claude Trichet said at his usual press conference that the Bank will “end long-term emergency loans and tighten the terms of its final 12-month tender”. In other words, the ECB is taking the first step to ending its recession-busting largesse. Although Trichet said the decision does not signal higher rates, the market did not take his words at face value. Analysts believe it is the first step in a tightening process that will bring higher rates next year. It was a positive factor for the euro. Whether British expats are returning to the UK or not, monitoring the currency markets is necessary to maximise the value of their sterling – and it is surprising that 22% of expats don’t actually do this. David Kerns, Personal Client Dealing Manager at Moneycorp commented: “In light of the worsening economic conditions, Brits living abroad should take immediate steps to obtain a clear overview of their currency risk. If relying on income from the UK, British expats should consult a currency specialist to understand how to guard their finances against adverse exchange rate fluctuations. During challenging times, there is certainly more that expats can be doing to manage their money – and to ensure that they are making the most of their income. By monitoring the currency markets and seeking expert guidance, they can avoid nasty surprises in exchange rates and determine the best time to transfer money to and from the UK.” Click here to open a Trading Facility, or to find out more or call +44 (0) 20 7589 3000. |
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