Raise interest rates to prop up the pound?

CLAPTON

Generali wrote: »

There's a benefit and a loss.

Exporters gain in the short term from a weaker currency as their products can be sold more cheaply abroad. Importers lose out because they have to pay more for internationally traded items.

In the longer term the evidence seems to show that inflation ends up eroding the export gains from a lower currency but the losses from imports being more expensive might be permanent or at least longer lasting.

I agree with the last part, a drop in the pound of a few percent is trivial although the fall of 12% before the Central Banks got stuck in was amazing (and probably terrifying if you crunched the numbers about what that would mean for food and petrol prices and family budgets). Longer term, Central Banks can't keep spending to prop up the quid. Either investors need to change their attitudes or interest rates will have to rise.

would you say that the 'longer term ' has arrived and that Germany is suffering from inflation and overall worse off.

Generali

Thrugelmir wrote: »

Inflation is benign currently.

Your point being...?

AG47

Yes all currencies are in a race to the bottom, but the pound sterling has suffered the largest fall in living memory.

Interest rates will have to go back up to normal now to stem the bleeding.

Thrugelmir

wotsthat wrote: »

I'm surprised you think it's that simple. Are you insulated from the decisions that determine where capital investments are made?

Everyone knows exchange rates fluctuate but capital investment is reduced when rates are erratic and volatile.

Factories don't lie idle waiting for a €1.05 exchange rate to turn on the widget machines and then shut down and import them when it's €1.78.

The Brexit process has caused uncertainty and looks like it'll continue to do so. Capital investment has/ will be affected which means we're probably going to be less able to benefit from favourable exchange rates going forward.

Forward buy or sell currency. Fix your costs.

Deal with the € every day. So monitor the fluctuations first hand.

AG47

Right now there are many members of the European Union that were emboldened by the UK vote to Leave the EU. They are feeling nationalistic and see the UK decision as a positive thing.

Unless the EU and the Bad Guys PROVE that it is a very bad move ALL of the EU counties will try to leave.

If the stock markets continue to soar over the next few weeks it will have a very, very, very negative effect on the European Union and those that want to show the world that there is no other choice but to follow their lead.

Watch for a MASSIVE attempt by the EU and the Bad Guys to destroy the financial markets in the coming weeks as it will be the only thing left to save the EU. Come mid-July, when the derivatives are settled, there won't be much left to pass around.

Monday could go either way as the US and the Exchange Stabilization Fund will be all over propping up the markets. In the end the crash will come and then it comes down to blame.

The EU will blame the departure of the UK for the crash.

The battles are raging and you have a front row seat

Crashy_Time

AG47 wrote: »

Right now there are many members of the European Union that were emboldened by the UK vote to Leave the EU. They are feeling nationalistic and see the UK decision as a positive thing.

Unless the EU and the Bad Guys PROVE that it is a very bad move ALL of the EU counties will try to leave.

If the stock markets continue to soar over the next few weeks it will have a very, very, very negative effect on the European Union and those that want to show the world that there is no other choice but to follow their lead.

Watch for a MASSIVE attempt by the EU and the Bad Guys to destroy the financial markets in the coming weeks as it will be the only thing left to save the EU. Come mid-July, when the derivatives are settled, there won't be much left to pass around.

Monday could go either way as the US and the Exchange Stabilization Fund will be all over propping up the markets. In the end the crash will come and then it comes down to blame.

The EU will blame the departure of the UK for the crash.

The battles are raging and you have a front row seat

The EZ is finished, UK did the right thing getting out first. "Punishing" Greece and "punishing" us are two totally different ball games, light years apart, the EZ can`t win this one.

padington

Hopefully there won't be a brexit, there will bregret, an election and new government winning with a mandate for a new referendum will succeed who will champion us to stay in with possible support from Germany to make changes to the EU as whole.

http://www.independent.co.uk/voices/brexit-petition-second-eu-referendum-how-to-get-new-vote-on-uk-membership-a7102646.html

AG47

Crashy_Time wrote: »

The EZ is finished, UK did the right thing getting out first. "Punishing" Greece and "punishing" us are two totally different ball games, light years apart, the EZ can`t win this one.

Yep EZ going down the toilet, all those unelected officials will now have to go and get a proper job, where they can't keep giving themselves a raise every year.

Crashy_Time

padington wrote: »

Hopefully there won't be a brexit, there will bregret, an election and new government winning with a mandate for a new referendum will succeed who will champion us to stay in with possible support from Germany to make changes to the EU as whole.

http://www.independent.co.uk/voices/brexit-petition-second-eu-referendum-how-to-get-new-vote-on-uk-membership-a7102646.html

What party is going to run on a ticket that means half the voters automatically won`t vote for them? Not going to happen.

Thrugelmir

padington wrote: »

Hopefully there won't be a brexit, there will bregret, an election and new government winning with a mandate for a new referendum will succeed who will champion us to stay in with possible support from Germany to make changes to the EU as whole.

Germany runs Europe.