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UK Leaves EU

I'm terribly sorry for my ignorance, but what exactly does UK leaving the EU mean? They use the pound, not the euro. What does it mean for travel? For finance? I am really confused.

Posted by
8889 posts

Monique. First, the UK hasn't left the EU. It has decided to leave the EU, the actual "divorce settlement" will take about 2 years.
The EU is a lot of things, most of which the traveller from outside the EU never notices.
* Free movement of goods and people. This is the one that most affects non-EU travellers. There is no customs between EU countries.
* Free movement of services
* Free movement of goods.

All this means that a citizen of one EU country can travel, live and work in any other EU country with the same lack of restrictions as if (s)he was a citizen of that country.
Business can operate in all countries with no restrictions. A Polish company can tender for a contract in France, and send it's workers to do the installation work as easily as it could tender for a job in another Polish city. No work permits required.
A British airline (e.g. EasyJet) can operate a service from Paris to Berlin without restriction. It could not operate a service from New York to Toronto, that would be restricted to a US or Canadian airline.

For the UK, all this will now end. The details will depend on the "divorce settlement". This will be a major change for UK businesses and citizens, but only a minor technical change for non-EU tourists.

Posted by
16894 posts

Since the UK had not matched other EU members in adopting the euro, or the Schengen visa agreement, or driving on the right, differences for tourists should be minimal. Currency exchange rates have been affected. There could be big changes in doing business between countries, or moving between countries to live or work. Speculation is a hot topic in today's newspapers and we've linked a small selection of articles at https://www.ricksteves.com/watch-read-listen/read/travel-news.

Posted by
712 posts

Thanks for that clarification! I was expecting immediate consequences that would directly affect me (I have a trip planned in October).

Posted by
7042 posts

The only immediate effect on us (Americans) is likely the world stock markets (including ours) and the economic result of the volatility of them. They will go up and down as this plays out over the next few years. The effect on us as travelers to the UK will be minimal, the most drastic effect in the short run is actually good for us - the lowering of the value of the £ and a better exchange rate with the $.

Posted by
873 posts

The most immediate difference you will notice is the more favorable exchange rate between USD and GBP/EUR - for Americans, that is. The British pound fell to its lowest level in 31 years last night -- that's my entire lifetime. Some airlines are dropping prices in anticipation of reduced travel to Europe and the UK, as well as between the two.

That said, none of this is guaranteed (or maybe even expected) to last. I am no financial expert, but I would expect that by October, markets should stabilize if not return to pre-Brexit levels, so you may not notice much of a difference at all. Though there could be another dip in October particularly, because that's when David Cameron is stepping down as a result of this vote, so depending on who his replacement is (I've heard Boris Johnson's name floated...), a bit of panic might set back in...

*Edit: I should note that *another possible consequence is the potential exit of Scotland and/or Northern Ireland from the UK. No idea if/when this would actually happen, but as soon as the Brexit results came in, rumblings started about another independence referendum. Scotland and Northern Ireland voted overwhelmingly to remain in the EU, so it remains to see how that plays out in the next year or two.

Posted by
4548 posts

Well since only Eastern Europeans seem to serve food or check people into hotels in the UK I can see pretty drastic impacts for tourists once they are all booted out of the country!

Posted by
937 posts

Hi all, consider this a PSA. As I've had to remove a number of Brexit threads today due to the political discourse that devolved into inappropriate posts, consider this my plea to make sure that you keep this thread about how the recent news in the UK affects travel. Otherwise, I'll have to remove this thread too and those who want to understand the travel ramifications will lose out (not that I see foresee significant ramifications).

Please and thank you.

Posted by
15852 posts

Monique, there's no need to apologize. I think there's a lot of confusion about the far-reaching ramifications of this separation, and time will tell. As posted previously, I wouldn't be concerned if you have a trip planned in the near future.

It is, however, good to be able to have civil and relevant discussions as this is a big deal which is ALL over the news, and which people are naturally going to have questions about. It is also a subject that may be touchy with the locals if traveling in the UK in the near future.

Posted by
15 posts

I will be going to England in two weeks (on a RS tour) and my biggest concern is getting some pounds for my dollars during the trip. The financial markets skidded wildly today; I expect that things will settle down.

Posted by
7175 posts

Buy your pounds now, before it bounces back. Similarly, prepay your UK hotel bills now to take advantage of the low rate.

easyjet is an interesting case - I wonder if they will relocate their HQ.

Was "driving on the left" ever an issue of negotiation? I don't think so. Note that Ireland, Malta and Cyprus, all drive on the left too.

Posted by
6113 posts

The divorce won't happen for c 2 years, so at present, you won't see any change. Anyway, as a tourist, the changes will mean less for you than for those resident here. It may have a devastating impact on those Brits who want to travel for extended periods in Europe.

Your dollar will go further at present. In the longer term, UK goods and services are likely to rise in price, which means in the longer term, your trip over here will cost more. There may be an impact on air flights within Europe after the separation. Duty free limits between the UK and Europe may well be reintroduced, limiting what can be moved without tax being paid.

VAT recouping procedures may need to change - at present, you claim from your European departure airport.

The UK isn't in Schengen and doesn't use the Euro, so no change required there.

Otherwise, it's currently business as usual.

Posted by
15852 posts

... that is the understatement of the century at the moment!

I was tip-toeing gingerly due to removal of that previous thread.

Posted by
9101 posts

So does this mean UK based hen and stag parties will be prohibited on the rest of the continent;)

Posted by
712 posts

Wow this is all extremely interesting! Who knows what the long term ramifications will be entirely!
Does this also mean that eventually UK citizens will have the same limitations on travel and working as US citizens do (visas, 90-day stays, etc...)? I'm sure there would have to be some type of clause that "grandsfathers" in certain business or individuals once these and other rules change.

Posted by
2516 posts

In answer to a question Does this mean….. ?

No one knows a thing - everything's up for negotiation.

Posted by
712 posts

Gotcha! Just sit and wait. But I can safely take from this that my October-January trip to Europe shouldn't be overly affected.

Posted by
18090 posts

Today the exchange rates are good. Tomorrow? Who knows. Otherwise there will not be much change for the next two years. Even then I bet it is slow and incremental. The UK is a great and generous nation and I want to believe that this will all go smoothly.

Posted by
4548 posts

$7000, is that for one trip? What kind of trips do people take? Our last trip to the UK at $1.66/pound we spent about $450/day and that was for 5 people.

I was thinking of converting just $2000 then worrying about keeping track of it, and the possibility of losing the cash somewhere.

Posted by
712 posts

I was also wondering if it would be best to convert my dollars to euros right now, but the exchange rate hasn't changed much, and all of my major purchases are paid for already. I will be renting my friend's apartment in Paris while she is in Spain and I will pay that on a monthly basis, but not sure if this whole situation will affect the euro to the extent where it will be worth my while to pay fees and surcharges and order euros. This may only be a dollar/pound thing. Keeping eyes open...

Posted by
18090 posts

David, my wife and I probably spend something less than $400 when outside of Budapest. My average trip is usually 16 or 17 days and if the entire trip were outside of Budapest it would run $8,000 to $9,000 including airfare. Some are more. Many are less. That's pretty comparable to the cost of a RS 14 day tour.

But we also do a lot of one off things. A driver for a day trip or an Opera Gala or Fly Fishing or Tank Driving or ...... And that jacks the costs.

Posted by
4548 posts

Thinking back 2 years and how expensive everything was in the UK (and particularly London!) I suspect with $1.38 = 1 pound that prices would be a bit more in line with the US, but of course in no way "cheap."

Monique: The euro is just in a bad way with Greece and now the UK, I can't see the euro has any upside risk even in the next year. BTW, many say that the current $1.10 = 1 euro is right at fair value. It was so far above fair value for so long we got used to it.

Posted by
1535 posts

Monique, usually in international relations matters are sorted on the grounds of reciprocity. If the UK is willing to keep their UE immigrants status as present, probably an agreement will be found allowing UK citizens to maintain their UE privileges. If UK politicians insist on sorting UE immigrants or even kicking out some of them, retaliation on UK citizens is to be expected. One of the few points on which UE does not compromise easily is the right of every UE citizen to live and work everywhere in the UE.

An easy example: Switzerland has bilateral agreements with UE allowing reciprocal freedom to live and work in Switzerland and all the UE territory. But the Swiss people has voted a referendum asking the government to limit the right of UE citizens to live and work in Switzerland. It was voted two years ago and negotiations have still to start, but the retaliation of UE (in the form of suspending any form of exchange of university students and grants to Swiss students) was immediate.

Posted by
1650 posts

Come on over. If you want to see a country going through 'interesting times' in a polite manner, come to the UK.

I have no idea what the future holds, but a holiday here would be fun. You are all welcome, to England, Scotland, Wales and Northern Ireland. And a warm welcome awaits you.

But you would be coming to a country trying, desperately, to work out what it is. I have been bombarded with yes friends saying 'I told you do' and some no friends saying 'next time yes.'

Come to the UK, the politest revolution in the universe!

Posted by
3391 posts

I worry most for the 2million+ UK citizens living in France, Spain, etc., who have built lives and businesses based on the agreements made within the EU. I hope something can be worked out for them so that they don't have to pull up stakes and move back if they don't want to!

Posted by
985 posts

I worry most for the 2million+ UK citizens living in France, Spain,
etc., who have built lives and businesses based on the agreements made
within the EU. I hope something can be worked out for them so that
they don't have to pull up stakes and move back if they don't want to!

EU citizens are automatically granted permanent residence status after 5 years, so it should not make a big issue for them in terms of being entitled to remain there. However their free access to medical care and their pensions may be an issue.

Posted by
712 posts

Medical care and pensions? ...That's deep. And now I can understand why this will take a long time to fully develop.

Another reason I asked this question is out of curiosity as to whether certain countries (like Greece) that are already faltering will be greatly affected, which could lead to some protests, riots, etc... I am going to Spain, Italy and France in the fall and am wondering in the back of my mind if such things may happen while I am there. Of course, no one can know for sure regardless, and anything can spark civil unrest, so trip plans will not changed and I'm really not even worried, but my mind couldn't resist going there when I first heard this news.

Also thanks everyone for listening to the Webmaster so he doesn't have to delete this thread. I'm really interested in this and don't want it to go bye-bye!

Posted by
6557 posts

Monique, if I were you I wouldn't change any plans re travel to the UK or elsewhere in Europe. The official "divorce" is at least two years in the future. Right now the pound is very cheap in dollars, but that may change. I don't see any potential whatever for civil unrest or anything like that, in any European country, in any timeframe relevant to trip planning. (Terrorism is another issue, amply discussed in other threads on this forum. It has already resulted in security precautions that may inconvenience travelers, but not IMHO in any risk that would justify changing travel plans within Europe.)

Just go ahead with the trip as planned, or as you're planning it. You may benefit from a better exchange rate for the pound, which is a plus from our narrow tourist standpoint. As Emma points out, "Brexit" is a sensitive topic with Brits right now and probably in the future, so best to tread lightly in conversations. I've found British people among the friendliest, kindest, warmest I've met anywhere (it helps that we can communicate relatively easily), and I sure hope they come out of this better off (though I fear not).

I hope the above meets the Webmaster's standard of relevance. (And thanks for all your good work, sir or madam!) And I'm sure we all look forward to MC-Glasgow's hospitality when we head north. Leave the latchkey under the door, MC! ;-)

Posted by
7579 posts

I would resist the urge to purchase Pounds. To put it into perspective, the recent drop from $1.48 to $1.37 is huge for currency markets, in the range of 7.5%, but balance that first with your costs to get currency, and then with other risks to determine value.

As for costs, in the US, it is hard to find a better rate than about 5.5% in normal times, considering an ATM over there is ~1% cost, your immediate savings are only 3%.if the Pound were to recover fully to $1.48 If it only recovers to $1.41, then you are even money, if it drops further when you travel, you start losing. Your "bet" has only a narrow margin of winning, and you are in effect betting that an Independent UK will be a good thing for the currency.

All that is at "best" rates, some places may lag on matching rates until they unload what they bought at old rates, 7.5% cost for currency is not unusual in the US (even up to 10-12% can be found), at the higher rates you are saving even less, but again, only if the currency fully recovers before your trip. On the flip side, if you are one of the poor souls that still pays a $5 fee plus 3% for an ATM withdrawal and 3% for using a CC, then your savings margin grows...but then I would invest in finding another ATM card and CC instead of buying currency.

From there, consider the risk of carrying thousands of Dollars on you while travelling and the lost interest or cost to tie up that money until travel.

If you go back a couple years, the euro did a similar dip, people were talking $1 for 1 euro...all speculation, little panned out, and the lower rates have stuck around since then for the euro.

Posted by
14580 posts

When it was expected that one to one relative the Euro to the $, the very best for the dollar was 1 Euro = $ 1.06. I don't think the Euro dropped lower than that relative to the $. At $ 1.11 the rate is not too bad either.