How long before the pound is worthless?

GooeyBlob

Bear in mind that US interest rates don't have much further to fall, but the BoE could still cut rates significantly. Expect the UK recession to be far worse than in other countries (France and Germany have been predicted to escape it... if only our government had been so prudent!) and there is a lot of bad news still to come on the economy.

My guess is that sterling will be lower than its present value a few months from now, but you never know.

pete80

I sold my house earlier this year and swapped 300K in Sterling into US Dollars at $2.01 to a quid. Now sitting on £80k profit if I switched back but that is pointless as the Pound is heading further south yet.

Also Germany is deeper in the p** than Britain is and this is forecast to be a global recession by next year. In parts of Asia recession is calculated as less than 3% GDP.

Hold tight !!

Blah99

Pandora123 wrote: »

When the euro threatens to surpass the pound, then the govt will push the euro through. That's the only way that people will agree to it. No going back after that.

No they wouldn't. That's a bad decision.

Wouldn't a weak pound make UK Plc exports more attractive thus stimulating the economy?

Exactly.

jon3001

jyonda wrote: »

Wouldn't a weak pound make UK Plc exports more attractive thus stimulating the economy?

What would you say are our key exports these days? Manufacturing has been in steady decline. The 'growth' has been in services but the reputation of the FIRE (Finance, Insurance, and Real Estate) economy must be in doubt.

1echidna

Manufacturing has very largely migrated to low cost base economies. In the UK only isolated sectors remain such as aerospace and some petro engineeering. We are very reliant on financial services which is in, arguably, its worst ever crisis. True we do not have high inflation or yet high unemployment but to pretend that this is just another crisis, exagerated by press hysteria, which will soon be replaced by business as normal seems foolish in the extreme. There is no way that financial services can return to business as normal given the flaws uncovered in recent months and future operations are likely to be far less profitable. In the crises of the seventies and eighties the country had North Sea oil and earnings from the City and a lot of slack in the economy which could be put to good use. With this downturn it is hard to see how the slack which is developing with the bursting of the credit bubble can be put to productive use and we are in all probability facing a permanent decline.

uk_music_lover

Media is the devil in this one! Destroying the US, EUROZONE, UK and alot of other curriencies at the moment with Doom n Gloom reports.
Yes we cant ignore whats going on! maybe a few more warm stories in gross contrast to numerous cash crunch reports.

Media its up to you!

Count_Dante

Pandora123 wrote: »

When the euro threatens to surpass the pound, then the govt will push the euro through. That's the only way that people will agree to it. No going back after that.

I simply don't see why swapping one currency for another will change anything at all, unless the current Eurozone subsidises the UK if it joins (for some reason).

Imagine if in the last few years London operated a different currency to the rest of the UK. We would have observed the value of 'RestofUK credits' falling in value to 'London credits', therby making things outside London cheaper to buy for Londoners and things within London more expensive for those outside it. But that has happened anyway, as wages and general prices have risen in London by a much larger level than in the rest of the UK.

Count_Dante

uk_music_lover wrote: »

Media is the devil in this one! Destroying the US, EUROZONE, UK and alot of other curriencies at the moment with Doom n Gloom reports.
Yes we cant ignore whats going on! maybe a few more warm stories in gross contrast to numerous cash crunch reports.

Media its up to you!

When Wile E Coyote ran off the edge of a cliff, he simply had to avoid looking down to stop gravity taking effect. I do not believe economic matters are the same.

LucyTheDwarf

Count_Dante wrote: »

When Wile E Coyote ran off the edge of a cliff, he simply had to avoid looking down to stop gravity taking effect. I do not believe economic matters are the same.

I love that analogy.

mr_jetlag

jon3001 wrote: »

What would you say are our key exports these days? Manufacturing has been in steady decline. The 'growth' has been in services but the reputation of the FIRE (Finance, Insurance, and Real Estate) economy must be in doubt.

I've seen this argument a fair few times. There is more to services than just finance.

Services sector growth is mainly driven by innovation and this is where I think the UK can retain its growth. Both scientific research and R&D are thriving (if woefully underfunded by the Gov) and if we are to recover, it's by creating NEW markets not competing on price in established ones. The US is investing billions in the teeth of a recession to create new "green" technology in the expectation that the recovery will mean rises in the oil price, again...

There's no point making cars in the UK with UK wages when you can create new kinds of software, games (a booming industry at the moment) and other intellectual property (films, music). The relatively low cost versus our competitors (while the £ remains down vs the $) will help move more companies here - MSoft, Google, HP are all setting up outside the M25.

Where I agree we need to retain some heavy industry is in the commodities / resources sector (oil, steel, and the equipment to make/mine them) because Britain still has a huge stake in energy and commodities without having much to extract within its borders.