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A key measure of inflation has fallen to its lowest level since September 2004, official statistics show, further weakening the value of sterling.

The Consumer Prices Index (CPI) dropped to an annual rate of 1.1% in September from 1.6% in August.

Meanwhile, the Retail Prices Index (RPI) inflation measure, which includes mortgage interest payments and housing costs, fell, to -1.4% from -1.3%.

The pound fell 0.5% against the euro to a six-month low of 1.0628 euros.

It also fell to a five-month low against the dollar of $1.5730. 'Frail'

This is bad news for the pound," said Duncan Higgins, senior analyst at Caxton FX.

"The CPI figures will weigh heavily on the UK currency and will continue to discourage investment."

Sterling has been under pressure in recent days - including from a report by the Centre for Economics and Business Research - which predicted that UK interest rates would remain at their historic low of 0.5% until 2011 and would stay below 2% until 2014.

Figures last week showing that UK industrial output fell unexpectedly in August also cast doubt on the strength of the UK economy.

Meanwhile the National Institute of Economic and Social Research has revised its estimate for GDP, forecasting that the economy did not grow in the June-to-September quarter.

And the British Chambers of Commerce (BCC) has said that while business confidence was improving, the economy remained "frail".

'Spare capacity'

The Bank of England aims to maintain CPI inflation at 2% to keep both prices and the broader economy stable.

If CPI falls below 1%, the governor of the Bank of England will have to write a letter of explanation to Chancellor Alistair Darling.

The slide in inflation was greater than had been expected, but was largely attributed to the spike in energy prices seen a year ago, which meant prices in September this year were considerably lower.

Electricity, gas and other fuel bills fell by 7.3% on the year, the Office for National Statistics (ONS) said.

Overall prices in September were unchanged from those seen in August, the ONS added.

Rising energy prices meant that inflation was likely to rise again in coming months, said Jonathan Loynes of Capital Economics, adding that the return of VAT to 17.5% from its current temporary 15% level would also push CPI back towards 2% by turn of the year.

However, he forecast the "huge amount" of unused production capacity in the economy would eventually push inflation down sharply, "keeping alive the threat of a period of outright deflation late next year or beyond".

Meanwhile chief economist at Schroders UK, Keith Wade predicted this would "probably will be the low point in inflation".

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Holidaymakers have more reason than ever to make the most of their money now the pound has fallen by nearly a fifth against the dollar and lost a tenth of its value in euros during the last year.

In an environment like this, every penny counts, so it is important that you do not end up paying too much for your travel money.

Here are 10 tips that could make the difference between Wish You Were Here and Wish You Could Afford It.

Buy foreign currency in advance

While it is still useful to have some currency when you arrive in a foreign country, it is very easy to end up paying too much for it, especially if you leave it until the last minute. The difference between the cheapest and most expensive currency deals could be as much as 10pc.

For example, a holidaymaker who ordered £400 of euros online from Travelex would receive €459. If he waited and bought the same amount of euros from Birmingham City Airport, he would only receive €418.

The cheapest places to buy currency are often online, although high street brokers can score well too. Both Travelex and Marks & Spencer online offer good rates. If you prefer to get money from the high street, the Post Office offers good rates and its service is available at many outlets.

The very worst thing to do is to wait until you get to a regional airport or a station, where you will receive very expensive rates.

Don't be sucked in by the words "zero commission"

It has become increasingly common for many bureaus de change to advertise that they are "commission free" – meaning that there is no one-off charge to exchange your money. However, this means that they are making their profit somewhere else, and that it is far harder to see how much your transaction is actually costing.

These "zero commission" companies are now making their money on the exchange rates they are offering, which can vary wildly. A transaction with Amex on the high street, although commission free, will result in your conversion costing nearly 9pc of your original outlay, while Travelex, which is also "commission free", will charge you nearer 3pc.

Peter Harrison, head of travel money at financial comparison site Moneysupermarket, said: "The phrase 'zero commission' can be very misleading. Customers need to learn to look beyond this."

Be savvy with cash withdrawals

It is very easy to turn up at a foreign airport and just stick your credit or debit card into the nearest cash machine without considering the consequences. This could land you with a hefty bill, so make sure you have prepared in advance.

If you use your credit card to take out money from a cash point you will pay particularly dearly, with a withdrawal charge of £3 at minimum for many cards, and a high interest rate even if you pay off the balance on your credit card in full at the end of the month. In addition, you'll also pay a foreign exchange "loading fee" in many cases, which would add a 2.75pc cost onto your spending.

Using your debit card is usually a better bet, but most still carry a loading fee and a cash withdrawal fee for each transaction.

If you want to withdraw cash from an automated teller machine (ATM) it is worth applying for a specialist card or even a whole account to make the process cheaper.

Nationwide's Flex Account debit card is one of the best options. In Europe it does not charge a loading fee and there is no charge for using a cash point. Withdrawing cash is also interest free. Outside Europe it charges 0.84pc for overseas spending as of next month.

To get the card, you'll need to open a special bank account with it, however. This may seem like a lot of hassle just for travelling unless you go abroad a lot – but you could always run your Flexaccount as a separate current account and top it up especially for travelling if you don't really want to switch bank accounts.

Other solutions to the ATM problem include using one of the better credit cards for travelling abroad or investing in a prepaid card, and there is more on these options below.

Finally, remember if you are being charged a minimum fee every time you take money out, it might be best to take out greater amounts of money at once. However, you will then have to make sure you have somewhere secure to store it.

Use the right credit card

Spending on a credit card abroad can be the right decision, provided that you pick the right credit card. It is often best to apply for a specific card just for travelling abroad, particularly if you go a lot. Do not use these cards for balance transfers or if you are not going to pay the balance off every month, otherwise they will work out to be very expensive.

The best card to apply for at present, according to Moneysupermarket, is the Santander Zero card, which used to be known as Abbey Zero. This does not have any charges for withdrawals or purchases. The only negative is its high 27.9pc cash withdrawal interest rate, but it is definitely a good card to use for purchases abroad.

The Post Office Credit Card has no charges for purchases, but will charge you to withdraw money. Both the Nationwide and Saga credit cards have no charges for purchases in the Europe Visa Region.

Consider a prepaid card

Pre-paid cards are becoming increasingly popular with travellers, even though only about 3pc of the nation currently have one. These cards are widely accepted and are safer than carrying cash. If you expect currency rates to fall you can load them in advance with euros or dollars and the exchange rate will be set at that point.

Prepaid cards do not charge foreign-exchange loading fees, although most will charge fees on cash withdrawals. However, they work out cheaper than most ordinary debit cards apart from the Nationwide option. According to recent research by the consumer body Which?, FairFX offers the best value euro and dollar cards, but only if you can get the card with the fee waived.

This can be achieved by applying through moneysupermarket.com or if you load a large amount of money onto the card. FairFX offers foreign ATM fees of €1.50 and $2 respectively. Caxton FX's card is also a good deal. Before you apply for a prepay card, check it suits your circumstances. Some will charge inactivity fees or limit the amount you can top up.

Banks have been hiking the charges for transferring your money overseas.

Barclays and HSBC are among those that have recently increased their charges - hitting people who regularly transfer money overseas for properties or family members.

Barclays increased its fees by £5. Its quick service is now £40, while the slower service costs £25 for each transaction.

HSBC now charges £17 for online transfers, and £30 from branches, an increase of £2 and £5 respectively.

With Lloyds, you pay 25 per cent per £100 with a minimum £16 for Euro transactions and £19 for other currencies.The maximum charge is £46.

Abbey has several options, but Chaps and electronic transfer charges are £25.

And RBS/NatWest has five options, varying from £8 to £27 depending on the value of transaction and method of transfer.

Nationwide BS charges £20 for international transfers. 'These charges are not the end of the costs bank customers will face,' says Isabel Unsworth, of currency brokers Caxton FX.

'They will also be receiving fees imposed by banks at the other end of the transaction.

'These bank charges quickly add up to a hefty levy.'

Despite its recent rally, the pound is still so weak against most foreign currencies that holidaymakers have to watch every penny to make sure they don't get their fingers burned while abroad.

As well as suffering punier spending power thanks to sterling's slide, banks and building societies too can hammer your finances while overseas.

Since last summer an increasing number of debit cards have introduced foreign usage fees while the cost of using credit cards abroad is also rising.

Now holidaymakers should run a slide rule over a relative newcomer to holiday finances: the prepaid travel card. In principle, these cards combine the benefits of travellers' cheques with the flexibility of a credit card.

Originally they were aimed at youngsters who didn't have any bank cards, but now providers are trying to widen their appeal. You simply load them with currency before you go - rather like a pay-as-you-go mobile phone - and use them like any other card to pay at shops and withdraw money from cash machines.

At the moment, you can put only euros or dollars on them, which makes them expensive in countries that use other currencies.

But because they are linked to the MasterCard, Maestro or Visa networks, they are widely accepted, and since you cannot spend more than you have loaded onto the card, they are a great way to ensure you stick to your budget.

This makes them popular for youngsters travelling abroad as parents can reload them over the telephone or online.

They are also good if you are worried about fraud - a dodgy retailer cannot access your bank account or credit through them - and they can be used by those worried about giving their card details to online retailers.

The most you can lose is the balance on them - there are no personal banking details attached - and you may even be able to claim back any losses through Visa or MasterCard if you are a victim of fraud.

Stephen Heath, managing director of FairFX, one prepaid card provider, said: "[The fraud issue] is a bit of a grey area; you don't have the same protection as you would with a credit card."

The cards also have numerous fees. There may be charges to apply, load money, convert currency, withdraw money and pay for purchases, as well as monthly management fees. However, competition among the 35 or so prepaid cards is driving these costs down.

The two cheapest, according to consumer watchdog Which? are Caxton FX and FairFX. They have no charges apart for withdrawals from cash machines and for a replacement card (£5 with Caxton FX and £5.99 with FairFX). Caxton FX has no cash withdrawal fee on its Global card, but charges $3 on its dollar card and €2 on the euro card. FairFx levies €1.50 and $2 for withdrawals at machines in the eurozone and the US. Both charge for ATM withdrawals in the UK.

Although most of the popular prepaid cards are commission-free, they all have charges hidden in the exchange rate. This is the similar to the difference quoted between the "buy" and "sell" rate at bureaux de change, and can be around 1% or 1.5%.

The Which? survey also looked at foreign exchange at airports and railway stations, which showed that "captive" travellers received the worst rates. The most expensive places to exchange money were found to be Birmingham and Manchester airports, where customers can be charged up to 15% in hidden commission.

"It's what you actually get for your pounds that counts, not the rate of commission quoted," Heath said.

Most credit and debit cards have a foreign conversion fee of around 2.99% when they are used for purchases, as well as minimum cash withdrawal fees of between £2.50 and £3.

Credit cards from Abbey - with its Zero card - and the Post Office are rare exceptions. Saga is free to use within Europe and 1% for the rest of the world.

Debit cards from Coventry Building Society, the Co-operative Bank and Yorkshire Bank have no conversion fee, though they do still charge for cash withdrawals.

Nationwide and Thomas Cook both introduced foreign conversion fees for the first time this year.

The weakness of the pound is not the only factor that will increase the cost of your holiday abroad this summer.

The number of banks that charge customers for using their debit cards overseas has almost doubled to 17 in the past year, according to research by uSwitch.com, the comparison website, with Nationwide and Thomas Cook introducing foreign transaction fees for the first time. The cost of using credit cards abroad has also risen, lifting lenders' earnings from these transactions by 6 per cent to £745 million a year.

If you take a debit card abroad you can now expect to be charged a conversion fee on every purchase, as well as a transaction charge. And it will cost you even more to withdraw money from a cash machine.

Those who bank with Lloyds TSB, for example, will find that for every £100 cash withdrawal, they will be stung for an extra £4.99 - a 2.99 per cent conversion charge and a minimum ATM fee of £2. Spending £100 in a shop on the same card will cost £3.99 - on top of the conversion charge there is a £1 retail transaction charge.

Using your credit card abroad is slightly cheaper, but you are likely to have to pay a foreign-usage charge of as much as 2.99 per cent each time a transaction is made. The worst culprits for imposing fees include HSBC, Alliance & Leicester and American Express. For every £100 you spend abroad on a credit card with any of these banks, you can expect to pay an additional £2.99.

Credit cards are even more expensive when you make cash withdrawals. On top of an average £3 ATM fee, interest is charged as soon as you withdraw the money - and at a much higher rate than usual.

So, what are the cheapest options for those who want to cut the cost of their holiday money?

Cash

Do not assume that a 0 per cent commission offer from a bureau de change means that holiday money is exchanged free of charge. In reality, uncompetitive exchange rates are equivalent to a commission charge of as much as 15 per cent.

The most expensive currency is sold to captive audiences, so avoid changing your money at airports and railway stations. At St Pancras International, the Eurostar terminal in London, you would have received only €189.26 for each £200 you exchanged last month, equivalent to a 13 per cent commission charge. This compares with €208.30 for Travelex in the same period. Remember, however, that if you take cold, hard cash on your travels, you have no security if it is lost or stolen.

Traveller's cheques

Trusty traveller's cheques remain a secure way of taking money on holiday and allow you to keep track of your spending, as you know before travelling exactly how much currency you receive for each pound. The exchange rates that you receive when you cash them in are not necessarily the most competitive, though, and you also have to find somewhere that will accept traveller's cheques.

Prepaid cards

If you want to combine the ease of plastic with the predictability of traveller's cheques, consider taking a prepaid currency card on holiday.

Similar to a pay-as-you go phone card, you can load a currency card with cash before you travel and use it as you would a credit or debit card. It is worth shopping around for the best deal, as some prepaid cards levy a small fee for transactions, though this is rarely as much as it costs to borrow money on credit.

As the market in prepaid currency cards is relatively new, you can load only euros or dollars on a card. The drawback is that if you are not holidaying in the US or the eurozone, you will be charged to change the money on your card into local currency.

The best-buy prepaid card is from Caxton FXFX. You can apply free for its chip-and-PIN Global Traveller card and use it anywhere that accepts MasterCard. It costs nothing to make transactions or withdraw cash. You can top up the card online, over the phone or by text message before you go away and while you are abroad.

You can also apply for and top up FairFX's euro or dollar currency cards at no cost. Foreign transactions are free, but you will be charged €1.5, or $2, to use the card in overseas ATMs.

No-fee, or low-fee, credit and debit cards

If you stick to conventional cards, there are still a few good deals, but you will have the hassle of opening a new bank account or applying for a new credit card before you travel.

The Post Office is the only provider that does not charge for foreign transactions. Its Platinum credit card offers 0 per cent on purchases for three months. Nationwide will start charging 0.84 per cent foreign-usage fees on its credit and debit cards from May 6, rising to 1 per cent on July 1. But its Gold card will still be one of the cheapest to use abroad this summer.

Saga's Platinum credit card, meanwhile, has no charge for transactions within the EU and only 1 per cent for the rest of the world.

Coventry Building Society, the Co-operative Bank and Yorkshire Bank all have debit cards with no conversion fee, but they will charge for ATM cash withdrawals and purchases.

Caxton FX has become the first foreign exchange company to offer its clients a money protection scheme that is authorised and regulated by the Financial Services Authority (FSA).

Within the unregulated forex industry, Caxton FX is the only broker to ensure the safety of client’s money through segregated Client Money Accounts.

Rupert Lee-Browne, Caxton FX’s Chief Executive, says the introduction of the scheme at Caxton FX is a great step forward for the company and a sign of the growing maturity of this leading foreign exchange boutique.

“Clients want to know that their funds are safe when they use a currency broker. As the only company in this sector who can offer real protection to customers, our aim is to ensure clients have peace of mind when using our service. We welcome the scrutiny of an independently regulated body since it offers clients genuine comfort about the safety of their money. It sets Caxton FX apart from all other currency companies in the UK.

Industry figures welcomed the move. Dominic Thorncroft, Chairman of the UK Money Transmitters Association says “The move by Caxton FX is specifically designed to address the issue of client fund safety head on and it has reached a significant milestone in the industry. This marks the next stage in the debate about client protection and regulation in the foreign exchange industry."

Industry figures welcomed the move. Dominic Thorncroft, Chairman of the UK Money Transmitters Association says “The move by Caxton FX is specifically designed to address the issue of client fund safety head on and it has reached a significant milestone in the industry. This marks the next stage in the debate about client protection and regulation in the foreign exchange industry."

- END -

About Caxton FX

Caxton FX is one of Europe’s leading foreign exchange companies. Founded in 2002 as an FX broker, it offers bank-beating rates and fee-free transfers on large and small currency transfer transactions as well as a market leading currency card product. They now exchange millions on a daily basis. The company comfortably meets the capital adequacy requirements set out by the FSA and is free of any debt.

About the Financial Services Compensation Scheme

The FSCS was set up in December 2001, following the Financial Services and Markets Act 2000 (FSMA). Since then, the FSCS has made over 350,000 compensation payments.

About the UK Money Transmitters Association

The UKMTA is a not-for-profit company, owned and run by its members. There are now more than 250 money transfer companies in full membership of the Association. The Association has been active in consulting with Government over the introduction of legislation surrounding money transfers, particularly the new Payment Services Regulations that come into effect later this year.

What about the impact on sterling?

Experts say expectations of another base rate cut, alongside the prospect of quantitative easing, have already had a negative impact on the value of the pound. However, quantitative easing could ultimately bring long-term benefits to sterling.

Alex Dunn, head of trading at Caxton FX, says: "While the so-called printing of money in the UK may have initially weakened the pound, the longer-term benefits look set to outweigh the potential negatives in the short term. Quantitative easing could sow the seeds of economic regeneration."

The UK's prospects of an economic recovery on the back of monetary policy and quantitative easing is heightened when compared to measures implemented in the eurozone.

The European Central Bank has been more hawkish about the interest rate than the Bank of England, says Dunn, with interest rates currently at 2%. Although this looks set to fall further, moves to raise the rate by the ECB last summer could have harmed the recovery of the eurozone.

"The ECB will find it difficult to embark on the path of quantitative easing as it would be very difficult to decide which particular eurozone country's should be favoured and how much should go where," adds Dunn. "This inaction could have the affect of weakening its economy and the euro."

By Jennifer Lowe

The recent plethora of rate cuts have yet to take effect and analysts at Caxton FX believe that the Bank of England is failing to address the wider issues of the flagging economy.

The government is now contemplating flooding the financial system with money, easing pressure on banks by giving them extra capital - a process known as quantitative easing.

Rupert Lee-Browne, CEO of Caxton FX, says, "The Bank of England has got itself into a position where it has no room for manoeuvre. We have been building up to quantitative easing for some time now and while in the very short term we may see some positive effects, this strategy will now only lead to higher inflation further down the road."

And with the Bank of England's gloomy inflation forecast predicted a fall to below its two per cent target for the next three years, Lee-Browne is expecting quantitative easing will happen "sooner rather than later."

Japan set a historical precedent from 2003 to 2005, when it employed quantitative easing to stimulate the economy with zero per cent interest rates, although experts are undecided as to whether it was successful.

By James Andrews, MSN Money

The Bank of England today cut interest rates from 1.5% to 1%, their lowest ever-level.

The move comes as the British economy falters, more jobs are lost and house prices continue to plummet. Figures out recently confirmed the UK has now officially entered recession and some analysts predict we could be facing the worst slowdown for 60 years.

But despite this, many are arguing that interest rates should now be frozen.

Should interest rates keep falling?

Rupert Lee-Browne, chief executive of currency broker Caxton FX, added: "Having done this, there is even less of a margin for banks to make money. It hurts savers and fails to address the wider issues of our failing economy.

"The Bank of England is backing itself into a corner, leaving themselves with no room for manoeuvre."

Other impacts

Another issue is that low interest rates tend to hurt the pound.

James Hickman, managing director of London-based foreign exchange firm Caxton FX, was gloomy.

"Sentiment is driving the pound to new lows every day and there doesn't appear to be any floor. News for the UK economy has been consistently bad and with concerns over the government's debt rating there is no end in sight."

By Sharon Flaherty

The cut follows on from a 0.5 per cent reduction in the base rate in January and is part of the bank's strategy to stimulate the flagging economy.

In the last few months, the Bank of England has reduced the base rate dramatically from its high of 5.5 per cent in January last year.

In 2008, interest rate cuts were made in February, April, October, November and December, with a further rate cut also made in January this year.

Today's (5th February) 50 basis point cut was one that was widely expected, however, not all quarters of the industry believe it was the right decision to make.

Rupert Lee-Browne, CEO of Caxton FX, was concerned b the reduction and suggested the new lower interest rate could undermine the BoE's economic power, potentially creating a longer term problem.

"Having done this, there is even less of a margin for banks to make money. The Bank of England is backing itself into a corner, leaving themselves with no room for manoeuvre."

The next interest rate announcement is due on 5 March.

By Sharon Flaherty

Caxton FX believes that sterling has acted as a shock absorber, providing the UK's struggling economy with a cushion of support.

Investors' decreasing confidence in the UK economy has caused sterling to decline to record lows in the last few months.

Investors' decreasing confidence in the UK economy has caused sterling to decline to record lows in the last few months.

In December, it reached its lowest level against the euro since the single currency was launched in 1999, reaching parity on the high street and 1.02 euros at interbank.

In January, sterling also plunged to a 23 year low against the US dollar, hitting $1.35.

Since the record highs in November 207, sterling has plunged around 34% against the US dollar. Against the Japanese yen, sterling has fallen nearly 15% since its peak in July 2008.

One benefit of the falling pound can be seen through the export businesses in the UK.

The 20% fall in sterling has meant exports are now much cheaper than they were pre-credit crunch, throwing a lifeline to these export firms.

Rupert Lee-Browne, Chief Executive of currency broker, Caxton FX, said: "Sterling is the one tool the UK government has left to promote growth in the economy.

"A weak pound improves exports and dissuades us to buy imports. Even though the government have had no hand in the weakening of sterling, it promotes real-world growth, rather than credit backed growth.

"Weak sterling will also make the UK a more attractive place to invest. Production may shift back to Britain as a weaker pound is an attractive proposition to manufacturers, especially car manufacturers."

According to Caxton FX analysts, the cost of doing business in the UK was becoming untenable and a weaker pound will reverse these problems.

Lee-Browne added, "A weaker pound will lay the foundation for solid economic growth. It's going to be painful for a while but worth it in the long term."

Private investors can still find a way to profit from the weakness of the pound, according to investment advisers.

While sterling rose against the dollar and the euro this week, helped in part by a strong statement from Barclays that lessened the fear of bank nationalisations, it is still weak relative to other global currencies.

Those planning to start trading the pound need to consider whether it is likely to continue on its downward trned. Analysts' views on this are mixed.

Caxton FX, the currency broker, thinks there has been no overal change in sentiment on the pound in spite of this week's rally.

"Banks are still not lending and traders still have no faith in sterling. Until we see the recession slowing, sterling will remain weak against all the major currencies," says Rupert Lee-Browne, Caxton FX chief executive.

But a number of analysts believe sterling could now be looking undervalued. "It's one of the cheapest currencies so we wouldn't be underweight in it at the moment," notes O'Dell at Investec.

"The pressures that have been pushing it down are being balanced by the draw of cheap investment, whether it be overseas tourists or exports."

By Sharon Flaherty

Yesterday, the IMF warned that the UK economy would shrink by 2.3 per cent in 2009, plunging Britain into the deepest recession of any of the industrialised countries this year.

Sterling has been struggling in recent months bringing parity between the pound and the euro closer and last week the pound hit a 23 year low against the dollar. However, today it lifted to hit a nine-day high against the euro.

By 4.10pm today, (29 January) the pound was trading at $1.43 against the US dollar and 1.09 against the euro.

However, it had fallen against the Japanese yen to be trading at Y128.54.

Rupert Lee-Browne, chief executive officer of currency broker Caxton FX, said: "Traders seem to have ignored the IMF's warnings as the markets have slightly improved.

"Although the pound has rallied slightly today, there is no overall change in sentiment amongst the banks or traders- banks are still not lending and traders still have no faith in sterling.

"Until we see the recession slowing, sterling will continue to remain weak against all the major currencies."

Private investors can still find a way to profit from the weakness of the pound, according to investment advisers.

While sterling rose against the dollar and the euro this week, helped in part by a strong statement from Barclays that lessened the fear of bank nationalisations, it is still weak relative to other global currencies.

Those planning to start trading the pound need to consider whether it is likely to continue on its downward trned. Analysts' views on this are mixed.

Caxton FX, the currency broker, thinks there has been no overal change in sentiment on the pound in spite of this week's rally.

"Banks are still not lending and traders still have no faith in sterling. Until we see the recession slowing, sterling will remain weak against all the major currencies," says Rupert Lee-Browne, Caxton FX chief executive.

But a number of analysts believe sterling could now be looking undervalued. "It's one of the cheapest currencies so we wouldn't be underweight in it at the moment," notes O'Dell at Investec.

"The pressures that have been pushing it down are being balanced by the draw of cheap investment, whether it be overseas tourists or exports."

By Ali Hussain

One of the world's best known traders said last week the UK economy was "finished" and that investors should get out of Britain.

Jim Rogers, the former investment partner of George Soros, the speculator who made $1 billion from the collapse of sterling in 1992, said: "I would urge you to sell any sterling you might have. It's finished. I hate to say it, but I would not put any money in the UK."

While Rogers' bullish views on China and commodities in the mid 1990s had a strong run, they have turned sour in the past six months and he has been wrong on other things. His remarks have been met with caution by advisers.

Other anyalysts point out that periods of sterling weakness can in fact be good for UK equities. We offer some tips, from investing to buying your holiday money.

- BUY THE FTSE, SELL THE DAX

- BUY DOLLARS, NOT EUROS

Analysts suggest those heading for a holiday in the eurozone should hold of buying their currency while those planning a trip to the US would be better off locking in a rate now.

Currency specialist Caxton FX saw a 60 % increase in demand for the dollar, and a 30% increase for the yen last week compared with the week before. Its analysts expect the pound to fall to $1.20 from its current $1.35 over the next month or two.

The euro, on the other hand, looks over-priced against sterling. Alex Dunn of Caxton FX, said: "A lot of poor economic news has already been priced into sterling, but whether this is the case with the euro this is very much open to question."

A good way to lock into a rate is to load currency on a prepaid card such as the Caxton FX card.

- BUY EXPORTERS

- BUY FIRMS THAT PAY IN DOLLARS

- SELL RETAILERS

- BUY ASIAN FUNDS

The dramatic slide of sterling against euro and other currencies since the start of last year has created big winners and big losers in the world of residential property.

Currency exchange company Caxton FX report that many British homeowners in Europe, who never intended to let their condos and villas, are now doing so as a way to offset costs, while others are selling up, trying to take advantages of the euro's strength, particularly if the economic downturn has not yet pulled their property values below the levels at which they were bought. For example, one Caxton client bought a house in France with cash in 2002 when £1 was worth 1.62 euros, then sold last autumn, when the ration was £1 to 1.12 euros. His gain on the sterling purchase price was £140,000, with more than £100,000 coming from the currency trade.

If that is one silver lining to the euro's strength, another is that European developers are also now offering "generous discounts" to sterling buyers, says James Hickman of Caxton FX. "Others have introduced a scheme where buyers pay a small deposit but then defer the rest of the payment for up to five years and pay only interest on it meanwhile," he says.

By Gemma Westacott

Speculation about the possible nationalisation of major UK banks, the Bank of England's liquidity push and potential further rate cuts led sterling to plummet. However, it had regained some ground by 4.50pm to be $1.3605.

The sterling has suffered just as badly against the Japanese yen, dropping to Y121.45 by 4.50pm. Meanwhile, it also fell against the euro to 1.0627 euros.

James Hickman, managing director of Caxton FX added: "Sentiment is driving the pound to new lows every day and there doesn't appear to be any floor...Parity against the euro is now a genuine possibility, and there is a chance we could see £1 to 100 yen."

By Gemma Westacott

Overall, in one week, sterling has fallen 4.5% against the euro, 5.8% against the yen and 6.1% against the U.S. dollar.

Meanwhile, since the record highs in November 2007, sterling has plunged around 34% against the dollar.

However, by 10.10 am today (21 January), sterling had rebounded slightly to $1.3796 against the US dollar.

Many analysts are now forecasting parity with the dollar, which has not been seen since 1985.

However, Caxton FX instead predicts that sterling will fall to $1.20 over the next month or two, due to weakness in the UK banking sector.

James Hickman, Managing Director of Caxton FX, said: "As equity markets continue to fall, investors look to safe haven currencies and the dollar is one of the main beneficiaries of this flight to quality.

"Further pressure is being put on sterling as UK banks look for more investment from the government, with calls for Lloyds and RBS to be nationalised. This could well lead to the UK having its government debt being downgraded from its current AAA rating."

By Gemma Westacott

The sterling tumbled against the US dollar today (20 January), falling by almost 5 cents, or 3 per cent.

During morning trading, the sterling fell as low as $1.3936, after opening the day at $1.4435. However, it has since recovered somewhat to be sitting at £1.3961 by midday.

The sterling has also fallen against the euro and the Japanese yen. It had reached 1.0739 euros, down from an opening level of 1.1022 euros and Y125.72 by midday.

Despite this, research conduted by Caxton FX has revealed that 70 per cent of people believe the sterling euro rate will improve by the end of January.

Ten per cent of those surveyed even believe the rate will go above 1.2 euros.

Only 30 per cent of people maintain a doveish outlook, suggesting the sterling-euro rate will stay the same or worsen.

Alex Dunn, head of trading for Caxton FX, said: "Sterling novedised against most currencies today and yesterday, including the yen, dollar and euro.

"The government is establishing a structure which will allow the Bank of England to move towards quantitative easing, which will be negative for sterling, because it will increase the supply of currency in the market.

"Investors are anticipating this event already, and sterling has fallen in response to this."

By Stephen Wilmot

Anyone who went on a shopping spree to Paris before Christmas cannot have failed to notice sterlings astonishing fall against the euro. For sterling against the dollar, the story is much the same. Valued at $2 as late as July 2008, sterling touched $1.44 at the end of December. New York was not the place to pick up presents last year.

But now that volatility has picked up and portfolios are becoming ever more global, advisers will need to consider that currency conundrum more closely. The pressing question for the UK retail investor concerns the pound. Will it continue to fall, and what does that mean for portfolio construction?

Rupert Lee-Browne, CEO of Caxton FX, a currency exchange service, recalls: "the dollar was hit very badly because everyone thought the US was going into recession but the rest of the world wasn't. There was a lot of money moving from the US into Japan and the eurozone. When the banking crisis spread to Europe, however, these flows reversed in a cahotic flight to safety.

"First it was assumed that the US, always ahead of the game, would move out of recession before its developed world peers. Second, the tightly leveraged carry trade began to unwind, supporting the dollars appreciation and pushing the yen to devastating highs. The pound and the Australian dollar, meanwhile, started to plummet. "

Currency traders exacerbated movements in both directions. Mr Lee-Browne notes: "You had the market making bets on sterling falling further, which became a self-fufilling prophecy: if you had enough people in the game shorting a currency, it falls."

By James Andrews

There was more misery for savers today, as the Bank of England cut interest rates for the fourth month running, taking the underlying rate of borrowing in the UK to its lowest ever level of 1.5%.

In the 315 year history of the Bank of England, rates have never been this low. During the Great Depression and the Second World War interest rates did not dip below 2%, the level the bank set last month.

Controversial cut

The Bank of England cut borrowing costs to try and get people spending again. But banks and building societies are not passing on the cuts.

On top of this, lower rates tend to hurt the pound. Like savers looking for the best deal on their cash, traders tend to invest in currencies from countries with higher interest rate. Lower rates could mean the pound falls further.

"Most businesses want further rate cuts because they see it as stimulating the economy and reducing their costs. However, the fundamental problem is that banks are not passing on the rate cuts," said Rupert Lee-Browne, CEO of Caxton FX.

"If we are to emerge intact from the recession, banks need to be happy to pass on rate cuts but fundamentally they need to make money and this will be more difficult if the base rate is brought down further - no bank can make a profit on loans lent at a margin of 1 % or lower."

By Rebecca Atkinson

Today's interest rate cut could be good news for holidaymakers as experts predict a rally in the value of the pound.

Since the Bank of England first started slashing interest rates in October, the pound has grown significantly weaker against these other currencies and at one point looked likely to reach parity with the euro for the first time.

However, the strength of the pound against the euro improved slightly over the Christmas period, and January's 0.5% interest rate cut is expected to spur this on further.

Rupert Lee-Browne, chief executive of currency broker Caxton FX, says the dramatic fall in the value of the pound before Christmas was largely driven by a lack of confidence among currency traders and short selling: "Everyone wanted to get rid of sterling before Christmas, and for short-sellers it was an easy bet that the pound would fall in value," he explains.

Low interest rates also played a role in weakening the pound, but experts believe January's cut will actually have the reverse impact on the strength of our currency.

Lee-Browne explains: "Although we aren't expecting a lot of movement, there could be a rally in the strength of the pound."

The fact that the European Central Bank is also expected to cut interest rates next week will also help bolster the pound's value.

By Sharon Flaherty

The Monetary Policy Committee (MPC) held its regular monthly meeting yesterday to decide whether to hold, cut or increase interest rates from their current level of 2 per cent.

According to analysts, the committee is likely to cut rates between 0.5 per cent and one per cent, bringing a zero per cent interest rate even closer.

Meanwhile, speculation is mounting that the government is preparing to print billions of pounds of money to help boost the economy at the same time as the chancellor, Alistair Darling indicated that the government was preparing to announce another package of measures to help the flagging British economy.

Rupert Lee-Browne, CEO of Caxton FX, believes that it is very likely the MPC will cut rates, but suggests this could undermine the bank's economic power, potentially creating a longer-term problem.

"Most businesses want further rate cuts because they see it as stimulating the economy and reducing their costs. However, the fundamental problem is that banks are not passing on the rate cuts.

"If we are to emerge intact from the recession, banks need to be happy to pass on rate cuts, but fundamentally they need to make money and this will be more difficult if the base rate is brought down further - no bank can make a profit on loans lent at a margin of 1 per cent or lower," he said.

By Paul Burgin

The lack of confidence in sterling has led to more record lows against other currencies, warnings that parity with the euro is fast approaching, and rumours that some MPs are backing a move to join the euro.

Sterling slipped to below 1.12 euros for the first time on 12 December.

Foreign exchange company Caxton FX says at certain airport currency bureaus, such as one at Luton airport, only 1.04 euros were being offered for £1.

Rupert Lee-Browne, CEO of Caxton FX, believes that the UK economy will not show signs of growth again until late 2009, and the pound will remain under pressure.

"With so much confidence in the euro, we could see parity be the end of 2009," he adds.

The UK government has now been forced to deny its support for the euro, after Jose Manuel Barroso, the European Commission's president, told French radio the UK was 'closer than ever' to joining. He justified his remarks by claiming that recent economic uncertainty had made the currency a far more attractive option to British politicians.

However, Europe minister, Caroline Flint, said there were 'no plans for Britian to join the euro.' Meanwhile, George Osborne, the shadow chancellor, criticised any discussions about joining the euro, saying 'our deteriorating economic performance is not a good reason to join the euro.'

Lee-Browne is also anti-euro, because he believes UK interest rates should be set by Britain. 'The basic fact is that the UK will continue to work on the edge of the eurozone and it would be economic madness for the UK to join the single currency."

UK holidaymakers heading to Europe over the New Year will get fewer euros for their pound than at any time since the introduction of the euro.

While the official pound euro rate edges towards parity, customers on the High Street are already getting less than 1 euro for their pound.

But exchange rates vary between foreign currency brokers.

The Post Office is offering some of the worst rates, while Thomas Cook is offering some of the best. "We effectively hit parity on the high street a while ago, and we're now looking at record lows," said Alex Dunn at Caxton FX.

Varying rates

Thomas Cook is offering 101 euros for 100, whereas the Post Office is offering just 98.04 euros.

At Travelex, holidaymakers would get 100.15 euros and at M&S they would get 99.42 euros for 100.

The difference between the dollar rates on offer is even greater. One hundred pounds would get $142.75 at Thomas Cook, but just $137.76 at the Post Office.

The reason why High Street rates are much lower than the official rates is because foreign exchange bureaux will take 4% to 5% off the rate for themselves, said Mr Dunn: "This is how they make money and cover themselves, should the official rate move dramatically during the day."

A better deal

But tourists may be able to get better rates away from the High Street from specialist online foreign exchange brokers that do not have the overheads that come with maintaining shops.

Before dealing with any foreign exchange broker, Mr Dunn recommends checking if they are registered with the Financial Services Authority.

"Rates are likely to fall further as the pound continues to weaken against the euro. If official parity is reached than UK tourists are likely to get just 0.92 euros to the pound on the high street," said Mr Dunn.

Analysts believe the pound will weaken further as interest rates in the UK are lower than those in eurozone, which makes the pound less attractive to foreign investors.

By Peter Cunliffe

The pound is set to hit parity against the euro before New Year's day or at least early in 2009, experts warned yesterday.

Sterling is on track for its worst yearly performance, measured against a basket of currencies, since the Great Depression of 1931.

Following last week's shock cut in rates by US Federal Reserve, taking its key rate to a range between zero and 0.25 per cent, the Bank of England is expected to follow suit in the new year, starting with an expected reduction from 2 per cent to 1.5 per cent or lower in January. In contrast the European Central Bank has tried to cool expectations of another big interest rate cut in January, bolstering the euro against both the pound and the dollar.

Rupert Lee-Browne, chief executive of currency trader Caxton FX, said: "We saw a slight strengthening of the pound on Friday but we suspect that's a bit of profit taking.

"Our expectation is that if we haven't seen parity by the end of 2008 then we'll probably see it in the first few weeks of 2009.

"All it would take is some bad news from one of the banks or a large employer announcing major job losses."

Lee-Browne said a recovery in the pound would only come when there was improved confidence in the UK economy or a collapse in the euro-zone.

By Lorna Blackwood

Investors looking to buy a ski property in Europe this season have been dealt a blow by the pound hitting a record low against the euro this week.

The euro climbed to 87.79p, building on a previous high of 87.73p. This is worrying news for would-be buyers from the UK who need to convert their money into euros. And the predictions from the experts are that it will get worse before it gets better. “There has been a marked decrease in the last three months, with the rate falling from €1.29 to €1.14 to the pound. It could go as low as €1.10 before Christmas,” says James Hickman, the managing director of the currency specialist Caxton FX.

So do people still want to invest in property in the eurozone? “Surprisingly, there is still a huge interest in the ski market throughout France, Austria and Switzerland,” Hickman says. But he admits that most sales are top-end. “Our average transaction is €400,000 to €500,000 for a property. As usual, this part of the market seems less affected by the current economic climate.”

Hickman acknowledges that the main concern for buyers is the decreasing value of the pound against the euro. To those who are still determined to invest in the European market, he recommends that as soon as buyers have agreed a sale they should fix an exchange rate. “This means whatever payments are due, the rate will not change, no matter what the market is doing. This is a very sensible thing to do, considering the volatility of the pound,” he explains. Buying property abroad generally means that an initial deposit is paid once a sale has been agreed. Further payments may not be due for months, sometimes years, so if you do not fix your exchange rate the fluctuation in the currency market could be very costly. Hickman gives a cautionary scenario: “if you had agreed a sale on a property for €400,000 three months ago, but were only paying for it at the current exchange rate, the property would cost you an extra £40,800 due to a fall in sterling. This means an increase of over 10 per cent in the property’s value in just three months.”

The pound sterling dropped a further 0.5 per cent against the Euro last night to £0.8801, making parity between the two currencies all the more likely in the near future.

The fall came after a think tank estimated the UK economy shrank 1 per cent in the three months to November and forecast it would contract further in November.

Rupert Lee-Browne , chief executive officer of Caxton FX, said: “The fall in sterling is all about a lack of confidence in the pound as investors believe the UK will be hit the hardest by the worldwide recession.

“Europe, on the other hand, is in a better position to recover from the current financial crisis. With this much confidence in the euro, we could see parity by the end of 2009.”

Elsewhere, the US dollar remains steady and strong against the pound. It is currently fluctuating between 1.48 and 1.50 to the pound.

By Ian King, Deputy Business Editor

A City broker predicted today that UK interest rates could fall to zero during the next six months.

Rupert Lee-Browne, chief executive of foreign exchange broker Caxton FX, said he expects the Bank of England's Monetary Policy Committee to cut Bank rate from 3 to 2 per cent at tomorrow's meeting.

But he predicted further rate cuts were likely in coming months, which could bring rates down to zero.

Mr Lee-Browne said: "Rates could even hit 1 per cent in December as the Bank of England continues to take action against the back drop of worsening economic sentiment. Rates could even fall further than this in 2009.

There is an historical precedent here. When Japan faced a banking crisis in 1989, it was followed by deflation and rates were eventually cut to 0 per cent in order to reinflate the economy. Interest rates in Japan currently stand at 0.3 per cent."

His comments follow further interest rate reductions this week by the Reserve Bank of Australia, which reduced the cost of borrowing from 5.25 per cent to 4.25 per cent, whil New Zealand's central bank is also expected to reduce rates again tomorrow.

By Bill Martin

The pound plunged to its lowest level against the dollar in 16 years yesterday as financial markets pencilled in another big cut in interest rates by the Bank of England today.

Fears that the length and depth of a recession will be worse than previously thought have prompted investors to dump sterling.

The pound dropped as low as $1.4664, before closing down more than one cent at $1.4768.

It has now fallen by 26% this year and is on track for the biggest annual fall since 1972.

The latest drop was triggered by figures showing the service sector shrinking at the fastest pace in 12 years.

Rupert Lee-Browne, chief executive of currency dealer Caxton FX, said "We are seeing quite a dramatic drop in the pound and the reason is straightforward: the rest of the world sees the UK as entering a significant recession and in global terms they see the recession we are facing as the deepest of any country.

"Investors want to get out of the UK and because of that they are selling sterling."

He said the pound could fall as low as $1.40 and could hit parity with the euro.

The pound plunged to its lowest level against the dollar for 16 years yesterday as financial markets pencilled in another big cut in interest rates by the Bank of England today.

Fears that the length and depth of a recession will be worse than previously thought have prompted investors to dump sterling.

The pound fell as much as 1.7 per cent against the dollar, dropping as low was $1.4664 before closing down more than 1 cent to $1.4768.

It is now back to the same level as in the spring of 2002 and has fallen 26 per cent this year, on track for the biggest annual fall since 1972. The latest drop was triggered by figures showing the service sector shrinking at the fastest pace in 12 years.

This fuelled speculation that the Bank’s Monetary Policy Committee (MPC) will today make another hefty cut in the cost of borrowing after loweing rates from 4.5% to 3% last month.

Analysts are forecasting anything from a 1 to a 1½ % reduction.

Rupert Lee-Browne , chief executive of currency dealer Caxton FX, said: “We are seeing quite a dramatic drop in the pound and the reason is straightforward: the rest of the world sees the UK as entering a significant recession and it all stems from the financial crisis.

“In global terms, they see the recession we are facing as the deepest of anyone. Investors want to get out of the UK and because of that they are selling sterling.”

He dismissed talk of a run on the pound as exaggerated but said it could fall as low as $1.40 against the dollar and could hit parity with the euro.

By Paul Burgin

Sterling could hit parity with the euro as the recession deepens and interest rates drop, warned currency broker Caxton FX.

New record lows against the euro were set last week, against a background of rising UK unemployment and a record producer price inflation fall in October.

Rupert Lee-Browne, chief executive of Caxton FX, warned parity could be reached as the recession deepens in the UK, affecting property, retail sales and interest rates.

He said: "The fall in sterling is quite extraordinary. This is all about a lack of confidence in sterling as investors believe the UK will be hit the hardest by the worldwide recession. Europe, on the other hand, is in a better position to recover from the current financial crisis. With this much confidence in the euro, we could see parity by the end of 2009."

Caxton FX analysts blamed the latest plunge in sterling on a record drop in the cost of goods leaving UK factories and confirmed market suspicions that inflation has peaked and is falling.

The recent 150 basis point cut in UK bank rates made sterling less popular, and Caxton FX warned a further 50bps cut could come as early as December, hastening the currency's decline.

Fuel and raw material costs also fell by 5.6 per cent - the fastest decline in 22 years - giving the Bank of England even further scope to cut interest rates in the coming months, Caxton FX said.

By Dominic Welling

The recession could result in a parity between the euro and sterling by the end of 2009, commentators have warned, as the pound plunged again this week and the euro hit an all time high against sterling yesterday.

The euro reached its strongest level (82.09p) since the creation of the single currency in 1999, and as of 12pm today (12 November) the interbank rate would buy you as little as €1.2150 to the pound sterling.

Rupert Lee-Browne , the chief executive officer of specialist currency broker, Caxton FX, said parity could be reached as recession deepens in the UK, affecting property, retail sales and interest rates.

His comments came as the euro has strengthened by nearly 3 per cent over sterling so far this month (November), to hit an all time high against sterling (€1.2176) yesterday (11 November.)

Caxton FX blamed the latest plunge in sterling on a record drop in the cost of goods leaving UK factories and confirmed market suspicions that inflation had peaked and was falling.

Fuel and raw materials costs also fell 5.6 per cent, the fastest decline in 22 years, giving the Bank of England further crope to cut interest rates in the coming months.

Alex Dunn , senior Analyst at Caxton FX, said: “We will see further interest rate cuts over the coming months. Many expect another cut of at least 50 basis points in December, which will further erode the yield appeal of the pound.”

“Moreover, worsening economic conditions in the UK, including property and retail sales, will accelerate the rise of the euro even further.”

Lee-Browne said the slide of the pound was also due to last week’s interest rate decisions by the Bank of England and the European Central Bank. Lee-Browne comments, “The fall in sterling is quite extraordinary. This is all about a lack of confidence in sterling as investors believe the UK will be hit the hardest by the worldwide recession.

“ Europe, on the other hand, is in a better position to recover from the current financial crisis. With this much confidence in the euro, we could see parity by the end of 2009.”

By Francis Shennan

Tourists, owners of foreign homes, and anyone sending money abroad to family or friends have been caught in a ‘currency market tsunami’ – and its not over yet. Experts believe the pound could sink to $1.40, losing almost a third of its value from its highest point.

Rupert Lee-Browne , chief executive of Caxton FX, also warned sterling could fall to $1.40 against the dollar. Over the last two weeks the pound has tumbled nearly eight cents, the biggest fall for five years. Some experts blamed Bank of England Governor Mervyn King for saying the country was already in a deep recession and warning of further sterling weakness. However, Lee-Browne said sterling’s slide was due not just to King’s remarks, which hinted at further interest rate cuts, but to investors selling emerging market assets for dollars.

“The fall in sterling has been quite extraordinary,” says Lee-Browne. “This is about the strengthening of the dollar on the back of the believe that the U.S. will be the first out of the recession. It is no longer about interest rates.” Travellers can lock in exchange rates using prepaid cards. Caxton FX has euro and dollar cards for buying currency free of charge at a time when you think the exchange rate is likely to be most favourable.

By Ali Hussain

Investors are rushing to exchange sterling for ‘safer’ currencies after it plunged to new depths.

Sterling hit record lows against the euro – falling to €1.22 – and a six year low against the dollar, trading at less than $1.53 on Friday.

The decline follows publication of data showing that Britain’s gross domestic product (GDP) contracted by 0.5% in the third quarter, stoking fears that the country was about to enter a deep recession.

The foreign exchange firm Caxton FX reported a 438% surge in the number of exchanges from sterling into other currencies last week, mainly into yen, Swiss Francs and US dollars. The average transaction size was £235,000. Wealthy investors have been piling into less volatile currencies – such as the Japanese yen and Swiss Franc. Rupert Lee-Browne, chief executive of Caxton, said: “Clients are looking to de-risk their assets and one of the easiest methods is to place their spare funds in secure currencies.”

By Laura Latham

In the unlikely event you haven’t noticed this, the financial markets are in a violent state of flux right now. This doesnt’ just influence how and where you buy your property, but also what it will cost. Exchange rates are equally affected by market forces, which means that the price you agree when you make an offer many not be what you actually end up paying by the time you complete.

High street banks do provide transfer services, but you’ll usually get wrose rates and higher fees and might not get expert advice should something go wrong.

“It’s surprising how often people use their local bank to transfer funds,” says James Hickman of the currency specialists Caxton FX. “The bank exchange rate is generally poorer than brokers offer, the process can take longer, and they won’t have options that could benefit you financially.”

Banks will almost certainly give you the tourist rate, far lower than the corporate rates available to brokers. At the time of going to press, for example, banks were offering sterling rates as low as €1.22 on a transfer of €100,000, while Caxton was offering €1.2834, which could save you up to £4,000.

Another issue with using banks is that you’ll be stuck with whatever rate is in place the day the transfer happens. Brokers, however, can provide ‘forward contracts’, meaning that the rate at which you buy your currency can be fixed up to several months in advance, allowing you to take advantage of the best rates at that time. “If the rate is poor and we think it will improve, we advise customers to wait,” Hickman says. “Then we’d aim to lock their money in at a better rate.”

By Paul Burgin

Sterling’s recent falls on world currency markets have been bad news for travellers -but they could be good news for those who hold assets, including holiday homes, abroad. The pound has fallen around 20 per cent against the euro in the past year, but the fall means many British investors have seen gains in the value of their European holdings when converted back to sterling.

For those hundreds of thousands of Brits who already own property in the eurozone, the sterling value of their homes has appreciated, but the currency risk is still present, manifesting itself in monthly mortgage instalments, utility bills and local taxes. ‘Transfer money every month and you are at the mercy of rates and fees for small payments. It is far better to move it all as one lump sum,” says Rupert Lee-Browne of Caxton FX.

Most owners should be able to budget the yearly running costs of their overseas homes. He recommends fixing the sterling costs with forward contracts, either as an annual whole or split it into as few chunks as possible. “You do not have to fix the timing and rate yourself. If we know what you want to do and by when, we watch the market and you can rely on our expertise to time it to your advantage.”