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Impact of Monarch demise
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joddle



Joined: 22 Feb 2010
Posts: 654
Location: Valencia

PostPosted: Thu Oct 05, 2017 8:04 am    Post subject: Reply with quote

Whilst I can understand many of the above points of view - the real bug in cheap travel for most UK airlines is that most of their fuel and services are paid for abroad - i.e. in Euros or Dollars and due to the 20% change drop in the exchange rate since Brexit, that means 20% more costs have to be found somewhere!!! and if we as travellers are not paying higher prices then something else has to be squeezed. Of course all the other factors add significantly to the problem - terrorism, the demise of the Turkish routes, and more expensive holidays abroad also due to the falling pound. People seem to forget that just before the Brexit vote your would buy around 1.4 euros and now it only buys about 1.12 - so on a 2000 holiday you have to now pay another 500.
In the UK with incomes almost static or actually falling in real terms, the increasing costs of everything are going to bite more and more as time goes on. Monarch won't be the only victim - just the first.
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COYS



Joined: 06 Jun 2015
Posts: 627
Location: Greek Islands

PostPosted: Tue Oct 10, 2017 7:19 am    Post subject: Reply with quote

Hmm. Whilst true that the rate spiked in early 2015, it hasn't been close to 1.4 on a regular basis for many years. The anomalous spike you mention is widely accredited to the prevailing (Greek) bailout crisis within the eurozone itself & more accurately represented a profound lack of confidence in the future of the euro rather than a very strong pound.
Personally I'm Br***t neutral but simply comparing costs between an unrelated high point & the current lower rate is not necessarily a cut & dried consequence of it. Currency fluctuates constantly, always has & always will, regardless of which way the electorate voted.
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Nemo



Joined: 14 Aug 2008
Posts: 7004
Location: Norfolk

PostPosted: Tue Oct 10, 2017 2:05 pm    Post subject: Reply with quote

COYS wrote:
Hmm. Whilst true that the rate spiked in early 2015, it hasn't been close to 1.4 on a regular basis for many years.

Yes, I'm sure I've not had 1.4 for years. The best I've had has been round about 1.2 before Brexit for the sort of small amounts needed to fund a holiday.
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joddle



Joined: 22 Feb 2010
Posts: 654
Location: Valencia

PostPosted: Tue Oct 10, 2017 2:44 pm    Post subject: Reply with quote

was at over 1.4 in Oct 2015 slow decline to Brexit then large drop from which it has never recovered
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Nemo



Joined: 14 Aug 2008
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Location: Norfolk

PostPosted: Tue Oct 10, 2017 4:44 pm    Post subject: Reply with quote

This got me thinking, as I know I haven't exchanged any euros at that rate for years. I looked back at the historical rates at the point that I usually travel in the year, and for many years, apart from 2015, when I wasn't lucky enough to buy any euros at 1.4 anyway, it was at the 1.1 - 1.2 rate that I remembered. Apart from 2015 I had to go back to 2007 to find the rate up at 1.4. So yes the rate has gone down but only to where it had been skulking around for many years.

I'm sure others, in different situations are affected very differently, so my point is only from my own personal perspective, that as a traveller, perhaps once or twice a year, this low rate is not an influence in my travels, as it's not much different to what it had been. I've just been to Portugal (on Monarch Sad ) and had the cheapest holiday I've had in years as food etc was such good value.
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Rogthedodge



Joined: 06 Feb 2011
Posts: 175
Location: Praia da Luz, Algarve

PostPosted: Tue Oct 10, 2017 4:56 pm    Post subject: Reply with quote

There is a positive side, I bought our house in Porty at 1.6... in 2003. If you get a calculator out and I sold today at 1.11, serious money, and yes we are thinking about it. Even if we only got what we paid for it.

R
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e-richard



Joined: 17 Oct 2004
Posts: 4859
Location: Algarve, Portugal

PostPosted: Tue Oct 10, 2017 5:31 pm    Post subject: Reply with quote

Rogthedodge wrote:
There is a positive side....

Now lets see, Rog.

So, you sell for the same price so you don't have to pay any CGT, repatriate the funds and where are you?

You now have a nice nest egg in the UK earning 0.01% interest and you no longer have a lovely Villa in the Algarve that you can visit whenever you want.

Sometimes, not everything can be reduced to sd Confused
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Rogthedodge



Joined: 06 Feb 2011
Posts: 175
Location: Praia da Luz, Algarve

PostPosted: Tue Oct 10, 2017 5:42 pm    Post subject: Reply with quote

LOL Richard, never a truer word spoken. Last time the euro got down to near parity, was it 5 years ago, we said yes we will sell and Mrs Rog, was listing out personnel stuff to keep. Not long after we walked into the house, looked at each other and said no we don't want to be doing that.

So Richard a very good reply....
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Moliere



Joined: 08 Mar 2007
Posts: 4592
Location: Magalas, Languedoc

PostPosted: Tue Oct 10, 2017 5:50 pm    Post subject: Reply with quote

Picking up your point, Nemo, there is of course a huge difference in FX rates between tourist (cash) and interbank, which we expats tend to look at for monthly transfers. For what it's worth, I seem to recall that the average rate of vs over the last 15 years is about 1.32.
Certainly it's been a hell of a shock for us pensioners, with our income cut by about a quarter since 2015, when the rate peaked at 1.42 to just 1.08 a couple of weeks ago. Today's 1.12 is a bit of a relief.

(Brother, can you spare a sou! Smile )

Mols
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e-richard



Joined: 17 Oct 2004
Posts: 4859
Location: Algarve, Portugal

PostPosted: Tue Oct 10, 2017 5:58 pm    Post subject: Reply with quote

Moliere wrote:
...there is of course a huge difference in FX rates between tourist (cash) and interbank

And an even bigger difference between tourist rates and airport rates. Last time I passed thru Gatwick people were buying Euros at 0.89 to the pound (and yes, I did get that the right way round) Crying or Very sad Crying or Very sad
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Moliere



Joined: 08 Mar 2007
Posts: 4592
Location: Magalas, Languedoc

PostPosted: Tue Oct 10, 2017 6:19 pm    Post subject: Reply with quote

To be honest, Richard, the disparity of airport rates has been so widely publicised for many years now, that I have scant sympathy for anyone who falls victim to them. It is so easy to get a better rate from the PO, from M&S or even from the airport bureaux by booking funds online in advance, that such people really have no right to moan (imho).

Mols
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COYS



Joined: 06 Jun 2015
Posts: 627
Location: Greek Islands

PostPosted: Wed Oct 11, 2017 6:39 am    Post subject: Reply with quote

Moliere wrote:
Picking up your point, Nemo, there is of course a huge difference in FX rates between tourist (cash) and interbank, which we expats tend to look at for monthly transfers. For what it's worth, I seem to recall that the average rate of vs over the last 15 years is about 1.32.
Certainly it's been a hell of a shock for us pensioners, with our income cut by about a quarter since 2015, when the rate peaked at 1.42 to just 1.08 a couple of weeks ago. Today's 1.12 is a bit of a relief.

(Brother, can you spare a sou! Smile )

Mols


But apart from that brief 2015 spike Mols, the last time rates held near 1.4 for a reasonable length of time was 2007, so in real terms although pension incomes have indeed been reduced, it has actually been over a much longer period with the occasional brief respite en-route. I think it's safe to assume that the days of 1.4+ are well & truly behind us & have been for some considerable time. While the lows do make for grim reading, your stated 15 year average, if accurate, gives a better & slightly brighter perspective for comparison.

For what it's worth airport exchangers are either stupid or lazy, often both.
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Moliere



Joined: 08 Mar 2007
Posts: 4592
Location: Magalas, Languedoc

PostPosted: Wed Oct 11, 2017 7:24 am    Post subject: Reply with quote

Indeed, COYS, it was noticeably higher than the previous few years, the collapse started in 2008, see graph on this site:

https://www.poundsterlinglive.com/bank-of-england-spot/historical-spot-exchange-rates/gbp/GBP-to-EUR

I do think that 1.40 was unsustainable (but it was nice while it lasted); as a one-time economist, I consider one can distil a "natural" value - if such a thing exists - of between 1.25 and 1.30. It's a rate which fits comfortably into the respective economies vis--vis product pricing and markets, even though it will of course fluctuate constantly and sometimes severely with political and economic pressures.

Mols
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COYS



Joined: 06 Jun 2015
Posts: 627
Location: Greek Islands

PostPosted: Wed Oct 11, 2017 7:34 am    Post subject: Reply with quote

Moliere wrote:
Indeed, COYS, it was noticeably higher than the previous few years, the collapse started in 2008, see graph on this site:

https://www.poundsterlinglive.com/bank-of-england-spot/historical-spot-exchange-rates/gbp/GBP-to-EUR

I do think that 1.40 was unsustainable (but it was nice while it lasted); as a one-time economist, I consider one can distil a "natural" value - if such a thing exists - of between 1.25 and 1.30. It's a rate which fits comfortably into the respective economies vis--vis product pricing and markets, even though it will of course fluctuate constantly and sometimes severely with political and economic pressures.

Mols


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