Britons rush to stock up on currency before the EU referendum, Post Office says

Sales of currency at the Post Office have surged 74 per cent since the weekend, compared to the same period last year

Hazel Sheffield
Wednesday 22 June 2016 13:08
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Sterling has gained 4 per cent in recent days as the Remain campaign has clawed back some gains in the polls
Sterling has gained 4 per cent in recent days as the Remain campaign has clawed back some gains in the polls

Britons have been rushing to get foreign currency ahead of the EU referendum, according to the Post Office.

Sales of currency at the Post Office have surged 74 per cent since the weekend, compared to the same period last year.

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Those going abroad are rushing to get cash to lock in exchange rates ahead of the vote, which some analysts have said could wipe more than 20 per cent of the value of the pound.

Post Office Travel Money, which accounts for one in four foreign exchange transactions in the UK, told Reuters that branch sales of foreign currency were up 48.8 per cent on Tuesday, while online purchases of currency were up 381 per cent.

Sales started to climb ahead of the May Bank Holiday and have continued an upward trajectory ever since.

The Post Office said it was well-stocked and was not worried about a shortage of foreign cash.

All you need to know about the EU referendum

"Currency sales remain buoyant and are up 36 per cent year-on-year for June to date in Post Office branches, online and through purchases on its prepaid travel money card.

This rises to a dramatic growth of 154 per cent for currency purchases made online – the majority of this for euros and US dollars," the company said.

FairFX, a prepaid currency card that allows users to lock in rates, said that it had seen a 300 per cent increase in holidaymakers exchanging money to guarantee good rates this week, but that businesses were holding back.

“Holidaymakers not wanting to take a risk on what may happen to the pound following Thursday’s referendum have been stocking up on currency in advance," said Ian Strafford-Taylor, CEO of FairFX.

Transferwise, a money transfer website, has said that it would suspend pound transfers on Thursday ahead of currency volatility because of the vote.

It suspended incoming pound transfers on Thursday morning, with outgoing transfers halted at 6pm.

The company urged customers to try and complete their money transfers early once the results are out, adding that transfers might take longer on Thursday and Friday if the referendum results in big changes in exchange rates.

Uncertainty around the outcome of the EU referendum has weighed on the value of the pound since the start of the year.

Sterling has gained 4 per cent in recent days as the Remain campaign has clawed back some gains in the polls.

It was trading at $1.4668 at close of play on Wednesday, up 0.25 cents on the day.

Predictions for what could happen to the value of the pound following the referendum have varied, but most analysts agree that the day after the vote will be one of extremes.

Some have said that the pound could fall to parity with the euro, where £1 equals €1.

The Bank of England has warned that a vote to leave the EU would cause the value of the pound to fall, "perhaps sharply", while households would delay spending causing lower demand and rising unemployment.

“The outcome of the referendum continues to be the largest immediate risk facing UK financial markets, and possibly also global financial markets,” the Monetary Policy Committee statement read.

Currency markets will be closely watched during the day and night of the referendum, with gains in the pound considered an indicator that Remain is ahead, while losses in the pound will be associated with a vote to Leave.

The EU referendum debate has so far been characterised by bias, distortion and exaggeration. So until 23 June we we’re running a series of question and answer features that explain the most important issues in a detailed, dispassionate way to help inform your decision.

What is Brexit and why are we having an EU referendum?

Will we gain or lose rights by leaving the European Union?

What will happen to immigration if there's Brexit?

Will Brexit make the UK more or less safe?

Will the UK benefit from being released from EU laws?

Will leaving the EU save taxpayers money and mean more money for the NHS?

What will Brexit do to UK trade?

How Brexit will affect British tourism

What will Brexit mean for British tourists booking holidays in the EU?

Will Brexit help or damage the environment?

Will Brexit mean that Europeans have to leave the UK?

What will Brexit mean for British expats?

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