Expats can stay strong in face of Brexit

Interest rates finally rose above 0.5 per cent in August – almost a decade after the emergency cut to that level. The Bank of England’s MPC voted to raise rates to 0.75 per cent on 2^nd August, casting aside worries over a no-deal Brexit, as it said that low unemployment merited a hike to keep inflation on target.

The 9-0 vote to raise rates was accompanied by a quarterly Inflation Report, which showed that, despite August’s hike, the market outlook was for rates to go up more slowly over the next three years than previously expected and that no further move is expected until at least the middle of next year. The recent rate rise was widely expected as the Bank had not sent out any signals to dampen forecasts of a hike, unlike in the run-up to the May decision when a move up failed to happen. The question now is whether this is a one-off hike, or the start of a slow but steady rise in interest rates. A lot will depend on how the British economy fares over the rest of this year and into 2019, before the UK’s exit from the EU. If there is a marked slowdown then it is likely that rates will stall again. Even worse, a recession would most likely see a further interest rate cut. 

For most people living abroad expat retirement planning needs to be thorough, and preferably carried out with the assistance of an experienced expat financial adviser. Unfortunately, unforeseeable events have the potential to derail all those carefully made plans and there is one such event that has affected nearly all British expats with equal detriment, and that, of course, is Brexit.