The Bank of England has just announced a 1% interest rate cut. Is this good news, or bad news for the translation industry? There is much media attention on the state of the economy in the UK as well as other countries. Our perspective is that fluctuating exchange rates make it difficult to plan ahead with any certainty.
Paying overseas suppliers
Paying translators in other countries in either USD or Euros has got increasingly expensive. This doesn’t just affect us, other UK translation agencies are also in the same position. Things were put in perspective for us this morning, whilst making international payments. What should we do, wait for the rate announcement and see whether the pound would rally? Or maybe pay everything in sight before the announcement in case the pound weakened further?
Predicting the interest rate cut
Ultimately we took the view that we should carry on as normal. In the end our immediate expectation of a 1% cut proved right. Our expectation was that this would not help sterling. We will watch with interest in order to see what happens next.
Cost of overseas transactions
Our real problem with international payments is the attitude of UK banks. Payments within the Euro zone are expensive in fees. In contrast, Euro countries can make international bank transfers electronically in most countries, free of charge. UK banks tend to charge heavily for international payments. The result is that we seek to minimise payments through our bank, and prefer to use PayPal.