Pounds to euros...

[Steve]

Going to a more 3rd world place than normal is the only way you can get more value.

Excellent, my trip to Brixton should prove cheap.

/ducks

[neonplanet40]

Im not booking any holidays for next year. You just won't get value for your money becuase our pound is worth so little. Im just going to go to England somewhere. Maybe the year after i'll think about going somewhere better. £1 = 1.02 Euro

[james_d]

Open an account at the Nationwide and get a credit card aswell. Both the debit & credit card has zero commission on forex and it's at interbank rates rather than the usual loaded spread.

Just be careful in spain that you do get charged in euros - a common scam is they charge you in pounds "for your convenience" and the conversion rate is definitely not in your favour - just check the display says euros before accepting.

[handscombmp]

I'd probaly do a bit at a time so if suddenly the rate becomes better again you aren't to out of pocket.

[jamin]

Excellent, my trip to Brixton should prove cheap.

/ducks

I finished work early Today, as it was getting dark and the work I needed to do in Brixton can wait till its light again. Brixton is scary!

[Gfinch]

I would go to Marks 'n' Spencer, Zero commission and good rates. Well, higher rates than other places, I wouldn't call them good

You could wait a month or so, but the exchange rate still might drop.

[chrestomanci]

Also, I’ve watched in dismay over the last few weeks as the pound has plunged against the euro. I’ve read around and some reports seem to suggest it’s a reaction to the interest rate being slashed and might even bounce back a bit? I really couldn’t afford for it to fall much lower. I’m sure there are many Hexites much more clued up about economics than I am, anybody have any opinions on whether I should change the money now or wait?

Low interest rates are part of the reason that the pound is so weak. In the past, when the UK had higher interest rates than other places investors would borrow money cheaply somewhere where rates where low (Usualy the USA or Japan), change it into pounds, and invest it in the UK stock market, where there was a good return because of the high interest rates. This was one of the causes of the high pound against the dollar and yen.

Since the credit crunch, investors have pulled out of risky stock market investments, and changed their pounds back into dollars or yen to pay back the loans. Any money they may have left over has been invested in safe investments like gold or US government bonds. (Hence the record high gold price)

This has had the effect of causing the pound and the UK stock exchange to drop. Meanwhile the dollar and yen have risen, and those two government have been able to issue lots of bonds cheaply to fund the cost of propping up their economies. Unfortunatley the UK government is in a worse position, because the pound is falling, they are finding it much harder to sell government bonds. (They need to sell plenty to pay for the recent extra spending), In order to shift all those bonds, the government has to pay a higher interest rate than normal. This is one of the reasons why the retail interest rate paid by consumers to borrow money is not dropping in line with the Bank of England base rate (which is realy just a recommended rate, like RRP), why would anyone lend money to Joe public at 3% when the government is offering 4% on much safer bonds.

Anyway, back to the original question, like other people, I suggest you visit money saving expert to find the best rate, and also spend on your credit card where you can, but make sure you get a credit card that does not add a surcharge for overseas transactions.

[Saracen]

If you plan on using a credit card (which, generally, is a good idea), then be careful which card you use.

There are cards that are based in Euros, and you can pre-load them. When you use them, your card charges you whatever the bill you're paying is for. So if you buy a 20 Euro rail ticket, you pay 20 Euros. You then know in advance what it cost you in pounds, because it'll be whatever the exchange rate was when you either pre-paid onto the card, or when you pay the bill back in the UK in Euros.

But most cards, if used abroad, are converted into local currency (Pounds) at whatever rate the credit card company choose at the time, and paying whatever fee they stipulate.

In other words, most or all cards can be used abroad, but some are designed for that purpose and are relatively cheap, while others can be a very expensive way of paying for something in a foreign currency.


As for what the exchange rate will be, I can't fault what crestomanci said, other than to say (as he pointed out) that it's part of the picture. Exchange rates are determined by a whole series of factors, including relative interest rates, but also including some very hard to quantify factors, like relative levels of confidence in various currencies, and even when and if speculators are having a go at a currency.

For instance, the pound has been dropping against both the Euro and the dollar, but not necessarily for the same reasons. The US economy is arguably in as much poop as the British economy, and in some ways, more so. The trouble (for us) is, the dollar is still regarded as the central world-wide currency. It's why most oil prices are expressed in the dollar, and its why countries like China hold vast dollar reserves. So, while the UK economy is looking like poop, just like the US economy, the dollar has a degree of insulation from the lack of confidence that inspires simply because of the pre-eminence (still) of the dollar.

Why is the pound dropping against the Euro? all sorts of things, some of which pressure it down and some of which pressure it up, but so far, the down pressures are winning. And I'm not personally convinced that's going to change any time soon. And, IMHO, the reason is that international money markets are looking at the state of the UK economy, at output projections, at debt levels, at what even the Chancellor admits is coming down the road in tax rises in a year or two, and has concluded that far from the UK economy being in a strong position, as Brown fatuously keeps proclaiming, we have very real, very large and structural problems to face, not least of which is our debt levels and our exceptionally large reliance on the property market. That latter unusually high reliance means we are unusually highly exposed to the effects of dropping property prices. It has been, in large part, confidence inspired by property prices that has fuelled the consumer-led boom we've had for 10 years, and now that that bubble has burst, it's going to be what makes it even harder for us to weather the next couple of years that most other countries. So when you combine the forthcoming tax hikes, the deflation in house prices, the growing unemployment figures, the collapse in high street trade (and some well-known names and I think we haven't seen the worst of that yet) the extraordinary debt levels, then the international markets have good reason to be sceptical of all the hot air coming from Brown about how well-placed we are to weather the storm. And the pound suffers as a result of their opinion.

Lanky123, if anyone, and I mean absolutely anyone, tells you they know what the pound will do over the next day, let alone the next few months, you've found a liar or a fool. Whatever you do, it's going to be based on opinion, though perhaps informed opinion but still opinion, and your best bet. It's a gamble whatever you do ...... unless you can find a way to buy your Euros a few months ago.

My opinion, and it's fairly uninformed, is that the pound may well drop more against the Euro, though I doubt it'll go too much more and, who knows, it could recover. It wouldn't surprise me to find that over the next few months, it will be higher than the current level at points, and lower at other points. So it might be worth waiting and keeping an eye on rates daily, and being prepared to move very quickly if we get a momentary surge.

But make no mistake, even doing that is a gamble. It will fluctuate over the months, but it could drop steadily for several days from now, and then fluctuate about a level never (in your time frame) getting back as high as it is today. Whatever you do, it's a gamble.


Oh, one last point. Several people have said using a credit card is safer. That's true, to a point. The Consumer credit Act (s.75) makes the card company "joint and severally liable" with the seller. If the seller goes bust, you can still go after the credit card company for your losses. But .... that only applies to transactions over £100 and under £30,000. The upper limit won't be an issue, but the lower one might. Paying for your course on the card will, I'm sure, be protected, but individual smaller items won't be.

Also, a less commonly known aspect of that protection is that it's a minimum of £100 per item charged. So if you buy a suit for £150, you're covered. But if your receipt shows trousers for £60 and a jacket for £90, you're not covered for either. Similarly, if you buy a computer for £400, you want it showing on the receipt as a £400 item, not as a collection of sub-£100 components. You might get a card company to protect to anyway, but it'll be a goodwill gesture, not a statutory requirement.

[Lanky123]

Thanks a lot for all the replies.

My appointment at the Halifax went well in that I now have a sufficient amount of money out of my savings and into a current account, but badly in that I can't get a credit card as I'm a student and have no steady income. What is it about credit cards that makes them best for this sort of thing - is there a regular bank account that would be as good? I certainly don't intend to go into the red over this trip, but I'm clearly still going to have trouble getting a credit card. I notice NatWest have a student credit card I might be able to get, but the rates for foreign currencies don't look that special.

[Saracen]

... What is it about credit cards that makes them best for this sort of thing - is there a regular bank account that would be as good? ....

It's the Consumer Credit Act, and the effect of s.75. See above post.

Basically, when someone lends you credit to buy a specific item (such as a holiday) they're jointly liable with the supplier of the holiday.

Suppose you buy something, say a carpet. After you've paid, but before you get your carpet, the shop goes bust? They have your money, and you don't have your carpet. If there's any money left in the company, there's a long list of who get it, and in what order. And, as an unsecured trade creditor, you're close to last, with pretty much only the shareholders below you. The taxman gets his cut(s), employees get wages, etc, banks get secured loans and mortgages, and by the time it gets to you, the customer, you'll be lucky to get a few pence in the pound.

However, subject to the criteria in my last post, if you paid by credit card, then the card company are legally liable as well as the shop. So if you don't get your carpet, or your money back, from the shop, you can get it back from the card company.

That does not happen if you paid cash, or if you paid by cheque, or if you paid by bank transfer, because none of those situations involve anyone extending you any form of credit. There is some protection if you paid by debit card, but it's nowhere near as strong, and not all debit cards offer it. Typically, Visa debit cards give you some cover, but Maestro doesn't.

So no, a regular bank account isn't as good. You'll get little if any protection of this sort. Suppose you pay for your course, get there and the company has folded. Then what?


As for getting a credit card, there are some cards that are prepayment cards. They're classed as credit cards, but you loads them up with money in advance. You put, say, £1000 on it, and then you can spend £1000. I know they exist, but have never used them, so you'd need to check to see if you get Consumer Credit Act protection using then since, strictly speaking, you're not actually getting credit. You're only getting access to the money you've already supplied. But they might offer a way out of the lack of a credit card. And some are, apparently, designed for foreign use and are much more economical than conventional cards. Just be careful to choose carefully, and study all the costs. Some charge an up-front fee. Some charge a fee per month, and some charge that but only if you don't use it in that month. So check out the contract terms carefully.

[Mike Fishcake]

They think they are cleverer than the world.

*irony detector explodes*

[Whiternoise]

Bear in mind the Natwest student card has a limit of £500 anyway!

Though you could get away with topping up the available balance remotely as you go along i guess (since i you're going to be doing that anyway to avoid interest?).

[Blitzen]

You might find that the incredibly good economic policies of our talented PM whilst he was chacellor have put us in such a fantastically good economic situation that pretty much every stable currency is now 'poor value'.

What is truely staggering is when you consider what in effect the world markets are saying about the state of the pound in relation to the dollar. Given the pratice of the greenspan puts, this is incredible that we are still valued so poorly, compared to a completely broken currency.

Avoiding going to a eurozone is silly. You should also avoid CHF,USD,AUD......

Going to a more 3rd world place than normal is the only way you can get more value.

1. Either a Tory, someone very foolish, or both would blame the government for GLOBAL meltdown. As much as you want to blame Brown for every problem on the planet, everything isnt down to him. Yes, more shouldve been done to shield us but its just stupid to lay the blame like you have.

2. I will, and always will do, get a better rate of exchange in certain African countries. I go to them often enough to know so currently i should think i know a little more than you on what i get for my money.5 This is why i chose Africa as my holiday destination as i know for fact its better value.

3. Avoiding the Eurozone isnt silly and i think that probably shows your low understanding of how things operate in Northern Africa especially.

[TheAnimus]

1. Either a Tory, someone very foolish, or both would blame the government for GLOBAL meltdown. As much as you want to blame Brown for every problem on the planet, everything isnt down to him. Yes, more shouldve been done to shield us but its just stupid to lay the blame like you have.

So its the global meltdown thats to blame for the pound falling against the euro?

Oh of course, it wouldn't in ANY way be to do with the pound been worth less than the euro would it? Its all a global meltdown, its just some bits are melting more than others? Wouldn't you then blame someone who never made hay whilst the sun shod, blame people who spent, borrowed, and spent, leaving with a massive defisit and burden of taxes heading for a recession?

Only someone who is un-beliveably foolish, ie someone who supports brown, would say that there is nothing that the government should be held accountable for.

I'm also guessing you've no idea about what i meant with regards to the greenspan puts, basically he made the rate of interest offered to people in the US appalling, this de-valued the currency. Now ours is slipping very fast against it, compared to other 'stable' currencies.

So who is to blame, the global boogieman?

The tide has turned, and mr brown was swimming naked!

2. I will, and always will do, get a better rate of exchange in certain African countries. I go to them often enough to know so currently i should think i know a little more than you on what i get for my money.5 This is why i chose Africa as my holiday destination as i know for fact its better value.

Better rate of exchange is a strange idea, as its 'better' in apples and oranges?

Its not as if your saying go GBP to ZWD to EUR you get a better deal?

3. Avoiding the Eurozone isnt silly and i think that probably shows your low understanding of how things operate in Northern Africa especially.

My point is saying to avoid the eurozone is silly because there are always cheaper places to visit, there always where, and the will be for the foreseeable future of the world economic status.

[Blitzen]

Only someone who is un-beliveably foolish, ie someone who supports brown, would say that there is nothing that the government should be held accountable for.

You read things that arent even written.
Where did i say i was a G.Brown supporter?
Also, by your 'logic' (loosest sense of the word), if someone isn't a Tory they are foolish. Nice argument there

Also, if you read through, i said that although the government isn't to blame, i agreed they did little to 'stem the flow'.

C'mon Animus, i had you down to be a little more careful in your posts. Restore the faith.

un-beliveably

and what is that supposed to be?

[Saracen]

1. Either a Tory, someone very foolish, or both would blame the government for GLOBAL meltdown. As much as you want to blame Brown for every problem on the planet, everything isnt down to him. Yes, more shouldve been done to shield us but its just stupid to lay the blame like you have. ....

I'm probably as big a Brown detractor as anyone, and even I don't blame him for the global meltdown. However, our current problems are partly global, and partly domestic. For instance, it'd be silly to blame Brown for the collapse in the US sub-prime market. It's nowhere near as silly to blame him for the state of our own economy, though, or for the fact that we seem to be so poorly placed comparatively to deal with the mess. And the impact on the pound largely reflects the international view, quite correctly in my opinion, that we're going to suffer more than most countries over the next few years, initially because of the depth of the impact, and more latterly, to pay for years of government spending and debt accumulation .... both on and off balance sheet. And that I do put firmly at Brown's door, him being the one proclaiming that the boom all the debt paid for was due to his wonderful economic management, and him being the one that personally designed the regulatory system that so spectacularly failed to do it's job, and the one that determined who had responsibility for what between the BofE, the FSA and the Treasury (which he directly ran).

He's not responsible for all the world's economic woes, or even all the effect of those global woes on us, but he sure is responsible for a good chunk of the mess we're in. We know he's responsible for running the economy, because he personally has been taking all the credit for it for a decade. Out of the mouths of fools ....