Many things have changed in UK after Brexit. Britain wants to be an independent country and last time even banks decided to change their policy about personal accounts of their customers. We also noticed that the Polish currency goes up. How does this affect us? You will find out in this article.
Banks in UK will close their customers accounts
Few days ago Barclays, which is one of the major commercial banks in England informed that bank accounts that belong to the people who live abroad will be closed. It is not a secret that all the rest of UK banks will follow Barclays. The condition for having a bank account in Great Britain is to have a permanent address in the country.
Another reason why such a decision was made is the huge costs that banks incur for maintaining the accounts of foreign customers who live in another country. People who have their bank accounts opened in UK, but they live abroad, for example in one of the European Union’s countries, automatically do not meet the requirements.
Barclays has just announced that it intends to send letters to all its overseas customers announcing its intention to close their accounts. People who received such a letter will be able to use the services of a British bank only for six months, after which their accounts will be automatically closed.
Read more at the Barclays website
What is going to happen to the funds in their accounts? We have no information on this, but we can expect it to disappear. This decision is highly controversial, but the most likely scenario is that other banks will follow Barclays’ lead. An alternative for expats, i.e. people who have accounts in British banks and live outside the UK, is to create a so-called global account at Barclays.
However, not everyone can do that, as one of the requirements is having at least £100,000 otherwise there is a monthly fee of £40. I realise that not everyone have that money. Especially if the Pound Sterling is the most expensive Fiat currency in the world. That means the bank prefers more affluent clients from whom they can profit.
Nigel Green, CEO and founder of deVere Group said that customers who have British credit cards will face similar problems. He also mentioned that banks in UK prefer to concentrate more on clients who are residents in UK.
What does it mean for investors?
British market, despite the disruptions related to Brexit, is still very attractive to investors. It is here that many world giants have their headquarters. Just look at the City of London, which is the financial centre of the world, and right behind it we have Canary Wharf, where many banks and other financial institutions have their headquarters.
The entire UK is a home for many people from Europe, Asia, Africa, South America. These are often very talented people who work hard. Many of them open their businesses in England, where, compared to other European countries, the conditions are still favorable.
But what impact could Barclays’ decision have? First of all, it discourages individual investors from having bank accounts in England and, as a result, it may weaken the British currency. At this point, the Pound Sterling is already down by about 10 cents against the dollar compared to July this year.
If investors with accounts in English banks stop trading the pound, demand for the currency will automatically fall, which means that the value of the Pound will continue to fall. Moreover, it is worth noting that for a long time banks in the UK have been making it difficult for foreign individual clients to open an account, requiring them to deal with many formalities.
All this under the pretext of fighting money laundering. Well, I personally think that banks are not that innocent, but that’s a longer discussion on another topic.
Both the policies of British banks and the weakening of the Pound may also discourage ordinary people who have come to work from other, poorer countries in Europe and the rest of the world, and as we know, these people are the driving force of the British economy.
Alright, we have analysed the current situation in Great Britain. But how can we, as people who want to make money online, use this information?
I think that in such a situation it is worth investing in declines, i.e. the so-called shorts, when we sell instead of buying. In this case, the more the graph goes down, the better for us. We have two options: launch a Short (selling) transaction USD/GBP, or invest in the fall of Barclays shares.
If you have no experience, you would like to learn and try trading, check out my article How To Trade Online Stocks? Step By Step Tutorial.
Interest rate cuts in Poland. Złoty is getting stronger.
Poland is a country whose economy is one of the most advanced and developing in all of Europe. It’s a country that has quite a strong influence on the situation in its region, which is central Europe. Today afternoon The Monetary Policy Council decided to reduce interest rates from 6% to 5.75%.
What does it mean? Above all, it affects all those who repay mortgage loans. Their installments are reduced, so they will be able to save more money. The 25 basis point move is in line with market expectations, but it still sparked a reaction.
After that decision one dollar cost PLN 4.37, and one euro PLN 4.59. This means strengthening the Polish currency – by almost 1% against the dollar. The currency Dollar’s price is presented at the chart below:
The question is: Why has the Monetary Policy Council decided to lower interest rates right now? Well, there is parliamentary election on 15th October, and currently ruling party is trying to do everything to to convince voters and stay in the power. It’s very likely that the opposition will take over the country after that day.
Usually the currency rate goes down before the election due to investor uncertainty and this in turn causes a decline in demand for the asset, in this case the national currency. The principle is that the market likes stability. However, the Polish Złoty is surprising in this respect.
Is it worth to invest our money in Polish currency? That’s complicated. We are 11 days before election. Everything may change overnight after 15th October. If the opposition will take over the country, Polish economy probably will go down. Why? I’m from Poland and I know the reality of my country.
Donald Tusk is the leader of Civil Platform party. He was a prime minister of Poland. During his reign, most of the national wealth was sold for next to nothing. Poland has lost many industrial plants, such as shipyards, factories and sugar refineries, which are now empty, but until recently they were teeming with life.
Can election change Poland?
As I just mentioned above, Poland is a country with a strongly developing economy, which encourages investment. I am not supporting any party in Poland, and I feel that we have to choose the lesser evil. For the economy is very important to keep stability. If the new government will take over the power, everything may change.
Currently, politicians are fighting for votes, and the election campaign is extremely brutal. What’s worse, supporters of their political idols are ready to kill each other out of hatred for one another. That’s very sick! Unfortunately, the “divide and conquer” principle works perfectly as usual!
The biggest problem is that the Civil Platform and its leader – Donald Tusk have no economic or political program. Their only goal is to overthrow the government of the ruling party, Law and Justice, in order to take over power themselves.
However, what they succeed in perfectly is playing on people’s emotions, as can be seen after the last so-called Million Heart March, when, realistically, about half a million people took to the main streets of Warsaw to support Tusk. Unfortunately, I must sadly say that this proves the lack of financial and political intelligence of Poles.
In my opinion, if the opposition will win the election, Polish Złoty probably will go down, the same as the economy. I do not think it is worth to invest in PLN now. The current increase in the value of the price of this currency may be temporary, as quickly as its value increases, it may also fall.
I would also like to make it clear that I am NOT a supporter of the currently ruling party in Poland. Personally, I believe that neither party works in the interest of the state and the nation. My opinion is fully based on facts. The best solution, which is impossible given the current lack of awareness among Poles, is to completely remove all politicians from their positions and replace them with young, creative people who want change for the better.
Great Britain is one of the countries with the strongest economy in Europe, but after Brexit, they started to change policy, including banks. Even opening account is more difficult than before. Unfortunately banks think only about their own profits, and therefore their activities have a negative impact on many factors.
Barclays, which is one of the leading banks in UK started closing bank’s account, which belong to foreign customers who live abroad. This may cause a decline in the value of Barclays shares and the British currency – the Pound. However, it could be a chance for investors to make some money, as we can launch selling transactions.
We still don’t know what is going to happen in Poland. At the moment Polish currency – Złoty (PLN) is going up after the decision of the Monetary Policy Council to reduce interest rates from 6% to 5.75%. However, the increase in the value of the Polish Złoty may only be temporary due to the election.
The political situation in Poland is not clear until the election day, which is on 15th October. If the opposition will take over the power the Polish economy probably will go down, the same as over 8 years ago, when Civil Platform ruled the country. This is the reason why I do not recommend investing your money in Polish Złoty.
I hope so you’ll find this article helpful, if you have any questions please let me know, and I’ll be happy to help you!