How far will Sterling be allowed to fall?

itsnever2lateisit?

I think the markets will soon come to realise that sterling is undervalued, and it will start to rise again. Certainly euroland wont like it too low as GB Ltd will be deemed to have an unfair advantage. (Not something the French will like or allow even)

Really2

!!!!!!? wrote: »

It's going to hit retail bigtime - upward pressure on the imported goods they sell the consumer combined with the consumer having less money to spend and being tighter with their purse-strings.


As for exports, it will certainly help them eventually but they currently account for 10% or less of GDP and it will be tough exporting in a global recession.

The £ is taking a hammering against the euro not the $.
We generaly buy in $ so why is it going to hammer retail as the majority of goods are imorted from non euro countries.
Exports in value are only a third less than imports(Imports are not much over 10% of GDP)
http://www.marketoracle.co.uk/Article4003.html
If people spend less on the continent it will be the same for this country so we will import less.

The £ will be allowed to fall against the euro, it is the $ that is important to the UK.

baby_boomer

Scotland on Sunday

"...."Regarding the fundamentals of the data, there is nothing out there right now to support the pound," [Deans, a London based currency dealer] says. "Really, we are waiting with bated breath to see how low it can go."

But I thought the UK economy had the sound foundations, after all our government's "investment", to ride out the crisis :rotfl:

amcluesent

Mandy will be waiting for the nod from Barrosso that the economic, political and social chaos created by Labour has reached the point where Britain can be bounced into the Euro and remaining control of Policing/Justice/Defence handed over to Brussels.

What ever is left of our pension schemes will now be 'fairly' allocated to 'hard working' Italian, Polish, Greek families....

Don't for one minute think this hasn't all been carefully planned for by those who will now be handsomely rewarded as they join the EU nomenklatura knowing that they and their families need never 'work' again.

pickles110564

!!!!!!? wrote: »

It's going to hit retail bigtime - upward pressure on the imported goods they sell the consumer combined with the consumer having less money to spend and being tighter with their purse-strings.


As for exports, it will certainly help them eventually but they currently account for 10% or less of GDP and it will be tough exporting in a global recession.

You are right !!!!!!? no one realises that soon so much pressure will be on the traders that hardly any will survive and we will lack all any choice whatsoever. Welcome to the new world of Toscos.

avantra

Look like it didn't stop at parity.

Pound slips below euro on Britain's high streets

WTF?_2

Heyman wrote: »

I know that inflation/deflation has been discussed here a lot, but would it be fair to say that the current devaluation of the pound that we're seeing, if sustained, will see inflation start to rise?

It depends if the pound devalues by more than the prices of goods are decreasing by.

i.e. There are deflationary pressures making the goods cheaper but a falling pound will put upward pressure. At the very least, things won't get nearly as much cheaper as they 'should'.

WTF?_2

Really2 wrote: »

The £ is taking a hammering against the euro not the $.
We generaly buy in $ so why is it going to hammer retail as the majority of goods are imorted from non euro countries.
Exports in value are only a third less than imports(Imports are not much over 10% of GDP)
http://www.marketoracle.co.uk/Article4003.html
If people spend less on the continent it will be the same for this country so we will import less.

The £ will be allowed to fall against the euro, it is the $ that is important to the UK.

Err, have you noticed that the pound is down from about $2.00 or so at the end of July to $1.49 today



That's a 25% drop in 5 months, I call that 'taking a hammering'.

ruggedtoast

Common sense would dictate that there wont be any more interest rate cuts to shore up sterling, and that Brown will have to curtail borrowing. However Brown's economic policies and common sense parted ways in 2005.

Personally I think he'll do exactly the same thing that Labour has always done, keep muddling through with the same policies and hope something comes along; in this case greater demand from abroad for our "exports" (whatever they are), and a devaluation of the euro to make us look marginally less hopeless compared to our peers.

I still think the IMF is on speed dial too.

moneymass

ruggedtoast wrote: »

I still think the IMF is on speed dial too.

The question is; Will they bother to pick up? We were certainly on their speed dial for a few years, and used it, did GB bother to listen? :rolleyes:

Edit

http://news.bbc.co.uk/1/hi/business/3333125.stm

http://www.timesonline.co.uk/tol/news/uk/article569336.ece

http://www.forbes.com/markets/feeds/afx/2005/12/20/afx2403468.html

http://www.independent.co.uk/news/business/news/imf-warns-over-uk-property-crash-415925.html

http://business.timesonline.co.uk/tol/business/economics/article2678215.ece