What will happen to the Pound after Brexit?

Brexit is finally set to happen tonight as the UK leaves the European Union at 11pm.

The exit comes nearly four years after the country voted to leave in the referendum of 23 June 2016 – with the months of wrangling over a deal creating even more uncertainty which has naturally had an impact on the pound.

In fact the currency has fluctuated ever since the UK first voted for Brexit – but what will happen to it now it’s finally here?

Here’s what you need to know…

What will happen to the Pound after Brexit?

The Pound has remained fairly steady against the Euro in recent days – although it’s uncertain what effect our departure will have.

In the run-up to the referendum in 2016 the Pound was worth 1.32 Euros – although the exchange rate had fallen to a lowly 1.11 Euros by the October following the vote.

However it’s worth noting that the value of the Pound has changed according to the news relating to Brexit – meaning it fell when the prospect of a ‘no deal’ departure reared its head, and rose when it became more likely that we would leave with a deal.

It also climbed in December after MPs finally passed Boris’ bill in Parliament.

Experts have suggested the exchange rate is unlikely to change following the UK’s departure, since we are entering into a transition period during which many of the EU rules and regulations will still apply to the UK in spite of it no longer being a member state.

What happens next will likely depend on how the future relationship between the UK and the EU pans out, with talks on a trade deal set to begin in the weeks following our exit.

If the UK fails to strike a deal with the EU by the current end date of the transition period – which is 31 December 2020 – and the transition period is not extended – then the country would leave with no deal and would revert to WTO rules on trade and security – which would quite likely also have an impact on the Pound.

Salman Haqqi, personal finance expert at money.co.uk, told metro.co.uk: ‘Historically we have seen the pound fluctuate around some Brexit milestones, so it’s impossible to know exactly what is going to happen to exchange rates.

‘To get a good deal, head to a comparison site to do your research. Aim to find the best exchange rate with the lowest additional charges, like delivery and commission fees, before committing to spending.’