binoculars over UK/Europe view

You are here


19th December 2018

In the 1960’s a frenzy swept across the world, particularly the UK, as fans became obsessed with all things related to the rock band, the Beatles. They called it Beatlemania. 

Today, in 2018, a similar frenzy is sweeping across the UK. Whilst people are still fanatics, it is for a completely different (and most would say far less entertaining) reason. Forget the Beatles; 2018 has seen Brexitmania (or just Brexit, if you want to be less fun) take hold of the UK as Britain looks to leave the European Union in early 2019. 

 If this comes as fresh news to you, I would like to welcome you out from that rock you have been living under. For everyone else, unless you have dedicated a few hours to reading some (really dry and boring) articles about Brexit, I have no doubt you were like me at the beginning of writing this guide - aware that Brexit is a big thing that I should probably know about, but also kinda confused and hoping it wouldn’t impact my spending money on my next European summer trip too much. 

 Here is where I tell you that I have some good news, and some kinda good but also kinda bad news.

 Good news: I’ve done the research for you. So sit back, have a quick gander of this article and you will be across all this Brexitmania in no time.

 Kinda good but also kinda bad news: Unless you have a crystal ball or that car from Back to the Future, we can’t say for sure what will happen in the foreign currency markets after Brexit. Rest assured though, we can give you some tips on what to look out for and monitor to ensure your travel money doesn’t take a hit from Brexit. 

Scroll down for the latest Brexit news 


Alright, hit me with the cold, hard, Brexit facts.

P.S. If you are already all over Brexit like a rash and just want to know how it will affect you as a Kiwi traveller, look no further.


What does Brexit even mean?

If someone talks about Brexit, they are talking about the UK leaving the EU.  Brexit is literally just Britain’s Exit. I still think ‘C EU l8er’ would have been a cool alternative, but it doesn’t seem to be catching on. 

Who's in the United Kingdom again?

England, Scotland, Wales and Northern Ireland form the United Kingdom. What about the rest of Ireland, you ask? The Republic of Ireland is part of the EU. 

What does the European Union do?

After the conclusion of World War II, 28 countries came together in an economic and political partnership in an attempt to encourage economic cooperation and preserve the peace.  The EU has since evolved to become a ‘single market’, allowing citizens of member states to move and trade freely as if it is one country. Pretty nifty, hey? 

Of the 28 counties, 19 use the Euro

Now we're across that, let's get back to Brexit.

What ACTUALLY happened.

On the 23rd of June 2016, the UK held a referendum, asking citizens if the UK should stay or leave the EU.

 The results? 

Stay - 48.1%

Leave (or should I say, C EU l8er) - 51.9%

What came next?

The UK had to invoke Article 50 of the Lisbon Treaty, which is essentially five paragraphs written on the off chance that a country wanted to leave the EU (never thinking that someone would actually want to leave).

Article 50 gives both sides two years to agree on the terms of the split (money owed, trade and border control, the movement of people throughout the countries etc). This two year period ends on Friday 29th March, 2019, however it can be extended if all 28 EU members agree. 

Why did the UK want to leave in the first place?

There were a number of arguements for and against Brexit, however they can be summarised into the following categories:

Budget: In 2016, the UK’s net contribution to the EU was 8.5bn pounds. Logic therefore denotes that leaving the EU would allow for a nifty little saving on the UK’s behalf each year. 

However, we can’t yet determine if the financial benefits of being part of the EU, like free trade and inward investment, outweigh the upfront costs. Plus, Britain's ‘divorce bill’ is looking to be anything upwards of 20 billion pounds. Ouchies. That’s definitely gonna need more than a cheeky side hustle to pay off. 

Sovereignty - Being part of the EU means British Parliament relinquished some control over domestic affairs. However, it also gives the UK a voice as part of a very influential global negotiating power. 

Trade - The leavers maintain that leaving the EU single market will allow the UK to make its own trade agreements on the global stage. In addition, they argue that most small and medium firms don’t actually trade with the EU, despite having to comply with the EU’s imposed regulatory burdon. 

The remainers highlight the benefits of being part of the single market, like not having to pay tariffs on imports or exports to member state countries. Plus, leaving would reduce trade and UK’s negotiating power on the global stage. Sheesh. 

Investment - Leavers encouraged the notion that detaching from the EU’s rules and regulations is the perfect chance for the UK to reinvent itself as a ‘supercharged economy’.

Remainers stand by the fact that leaving the EU would severely diminish the UK’s status as one of the world’s biggest financial hubs. Removing itself from the EU will, in turn, stop it from being an English-speaking gateway to European businesses and banks. 

 Immigration - All EU member countries allow for the free movement of citizens throughout. So, UK citizens could live in Europe (hello, bulk croissants) and vice versa, European citizens could move to the UK if London was, in fact, calling.

As a result, immigration to the UK spiked, leading to housing and service provision issues. Whilst leaving would allow the UK to set their own immigration rules, it may impact the country negatively in other ways as the net effect of immigration was argued to be positive overall. 

 Jobs - “The immigrants are taking our jobs!” is essentially the argument from leavers. 

Remainers argued that over 3 million jobs would be lost as a result of Brexit. If the UK is no longer a gateway to Europe, a lot of companies and jobs will move elsewhere - like Dublin. Plus, reducing the labour marketing could not only slow down the economy, but would widen the gap further on skill shortages that are otherwise supported by immigration. 

Security - “We’re letting the terrorists in!” is the argument from leavers, as open borders mean there is an inability to check and control individuals as they enter. 

 Remainers argue the opposite, saying the EU is an important pillar in the UK’s national security as it allows for the exchange of criminal and passenger records along with joint counter terrorism efforts.

What happens if a "divorce agreement" can't be made prior to Brexit?

As it currently stands, the EU has put it's support behind the proposed agreement. Now the agreement just needs to be passed through UK parliament.

There are essentially two options should parliament not agree, and neither are particularly enticing for the British population (or the rest of the world trying to keep up). 

Option 1 - British Prime Minister Theresa May announces a ‘no deal’ prior to 21 Jan 2019. The UK government then has 14 days to pull their finger out and sort out the next course of action.

Option 2 - If there is no announcement by 21 Jan, the UK government has 5 days to articulate how they want to proceed. 

Both options would most likely lead to the UK choosing one of the following courses of action:

  • Leave the EU without a deal
  • Seek an extension 
  • Hold another referendum
  • Have a final push in negotiation


Each of these options would have their own set of consequences. However, providing an extension is not approved and there is not another referendum, Brexit will still occur on the 29th of March 2019… with or without a deal. Eeeep. 

There you go - Brexit in a nutshell. It’s a big, convoluted beast that is nowhere near as groovy as Beatlemania. We recommend signing up for Currency Alerts to see if Brexit causes the NZD to gain against the GBP. It’s also worth keeping any eye on the news for future updates, particularly around the following key dates. 

Update 13 December:

Yesterday’s vote of confidence against PM Theresa May saw her win 200 votes to 117. Whilst this is positive for her, it still means she doesn’t have support from a third of her party when it comes to negotiating and passing the proposed Brexit agreement. 

Her win may have removed some of the uncertainty surrounding her Party’s (the Conservative Party) leadership in the UK, however it came under the promise that she will not stand for re-election. It appears she has taken this short term win in the hopes that she will be able to get the Brexit agreement across the line, ready for the March 29 Brexit deadline. 

 After the December 11 deadline for MPs to vote on the Brexit agreement was delayed earlier this week, we still do not have a date for the vote to take place. This, coupled with the continued speculation about the Brexit deal being passed means the pound still has a long road paved with market volatility ahead. 

If you do need to purchase GBP in the next few days, we recommend adding Rate Guard on to your transaction in store. Not only is it free, but if the Kiwi dollar improves against the pound within 14 days of purchase we will refund you the difference*. 

 Summary: May stays but the UK's still leaving. 

Update 11 December:

Today, British MPs were supposed to vote on the current Brexit deal. However, after expectations that the deal would have 187 votes against 419, UK Prime Minister Theresa May has delayed the vote to avoid the almost certain defeat. To put the number into perspective, the deal needs 320 votes to pass.

So, where does this leave the UK? Not in a great position if we are being honest.

There is no majority within the UK’s political factions that are in favour of any course of action. To recap, the potential options are:

>> A no deal. This would see the United Kingdom leaving the EU with nothing but their dreams, some debt and a good cup of tea. Definitely no trade deals, border negotiations or things that are quite important for the wellbeing of the UK’s economy and best interests of the citizens.
>> Joining the European Free Tree association. Once again, there is no real majority in favour of this.
>> A people’s vote on a Brexit agreement.
>> A second referendum to see if UK citizens are still in favour of leaving the EU. While some of the population could vote differently in a second referendum, obviously a second referendum undermines the original referendum at a considerable cost to the UK’s economy. According to a written statement to Parliament from March 2016, the estimated cost of conducting the original referendum was a whopping  £142.4m. Imagine paying that bill again.

Most citizens and politicians alike are against a no deal, but also have no alternative as to what a deal should look like. It has been confirmed that the UK can decide not to leave the EU if they wish, however the EU has made it clear that they will not renegotiate the withdrawal agreement. Crikey.

The lack of support for any of the options has resulted in the odds of a no deal rising exponentially. It is also highly likely that the March 29 Brexit deadline will be extended.

If you haven’t already guessed, the UK government is in disarray at the moment. Or, as my dad would say, they are running around like a bunch of headless chooks. The prospect of a general election is becoming more likely, especially amidst calls for May to resign. If that’s the case, who would take her place, and would she ever get the chance to work in ye old London town again?

This growing mass of uncertainty has reflected on the pound’s performance, pushing it down lower against most major currencies.

If you’re travelling to the UK soon, it's definitely worth keeping a close eye on Brexit news to see how they are affecting the GBP. Maybe also take them some tea, everyone sounds really stressed over there.

Update: 29 November

Overnight saw the UK Treasury and Bank of England (BoE) provide risk assessments of potential Brexit scenarios.

The Treasury forecast that a ‘no-deal’ scenario would lead to a 9.3% hit to UK Gross Domestic Product (GDP) over 15 years. The BoE forecast the same scenario would lead to a 25% fall in GDP, thus resulting in a need for the Bank to increase interest rates to 5.5% to control inflation.

The Treasury didn’t forecast the recently agreed deal with the EU, however, a close variant was modelled. The model showed a 3.9% decrease in GDP over 15 years. Whilst this is definitely better than the consequences of a ‘no deal’, both institutions agree that the UK will be poorer economically under any form of Brexit situation, compared to just staying in the EU.

In addition to this, talk of a second referendum is continuing to grow. It will be interesting to see what happens in the coming weeks as Prime Minister Theresa May continues to rally MPs for support of the current agreement. Should May not gain enough support during the vote on 11 December, the UK will need to return to the drawing board and face the reality of a ‘no-deal’ scenario.

Therisk assessment scenarios did not have a major impact on the pound against the AUD; even so, the market will remain extremely cautious as we move through the next few weeks.

Update: 27 November

Months of negotiation have resulted in a draft withdrawal agreement covering Britain's divorce bill. The draft withdrawal agreement protects the rights of citizens affected by Brexit (Brits living in the EU and vice versa) and keeps the Irish border open for trade. 

In an effort to get more time, both sides have agreed on a 21 month ‘transition period’. This will allow:

  • Businesses to prepare for post-Brexit rules
  • Confirmation of final details of the new relationship
  • Continuation of free movement
  • The UK can negotiate its own trade deals in this time, however they will not come into effect until the transition period ends. 


EU leaders gave their formal backing to the Brexit deal at a summit on Sunday 25 November. They also made it clear that there is no plan B except for a ‘no-deal’, should British MPs in the House of Commons reject the deal during a vote held on the 11th of December. Getting this deal approved will be challenging, with a number of MPs anxious about the proposal. 

May must now spend the next few weeks selling the deal to MPs before the vote on December 11. 


This blog is provided for information only and does not take into consideration your objectives, financial situation or needs.  You should consider whether the information and suggestions contained in any blog entry are appropriate for you, having regard to your own objectives, financial situation and needs.  While we take reasonable care in providing the blog, we give no warranties or representations that it is complete or accurate, or is appropriate for you.  We are not liable for any loss caused, whether due to negligence or otherwise, arising from use of, or reliance on, the information and/or suggestions contained in this blog.