Pound going through the floor.

mwpt

setmefree2 wrote: »

Because we have a floating exchange rate. Lots of countries would love a devalued currency right now to get some inflation.

We will get some inflation and hopefully a rise in interest rates.

It's not as black and white as you seem to think.

Except I'm not the one saying it's black and white, the opposite. Good and bad. Whereas there are those here who would be saying how fantastic it was and indicative of how strong brexit has made us if the Pound was appreciating.

I think you realise this was my point, I'm surprised you're being obtuse about it.

Mortgagefreeman

mayonnaise wrote: »

what's the right value for the pound?

A very good question, and one Poliiticians have two answers for.

1. A strong pound shows a strong Economy.

2. A weak pound is excellent news for our Economy, as it boosts our exports.

Nick_C

Mortgagefreeman wrote: »

A very good question, and one Poliiticians have two answers for.

1. A strong pound shows a strong Economy.

2. A weak pound is excellent news for our Economy, as it boosts our exports.

The value of the currency also depends on interest rates.

UK interest rates fell 50% (0.25 percentage points) on August 4th.

Sterling fell in value by 1.5%

It is likely US interest rates will rise soon, and the USD will strengthen further against the GBP if that happens.

Jon_B_2

One thing I'm constantly wondering and I don't profess to being an expert in economics is why are the media not talking up an interest rate rise in the U.K.?

Whilst devalued Sterling is great for exporters, we import far more and if this decline continues to go unchecked, inflation will be rampant in 2017.

TrickyTree83

Jon_B wrote: »

One thing I'm constantly wondering and I don't profess to being an expert in economics is why are the media not talking up an interest rate rise in the U.K.?

Whilst devalued Sterling is great for exporters, we import far more and if this decline continues to go unchecked, inflation will be rampant in 2017.

Sterling fell sharply in 6 minutes before recovering.

It's likely a bug, some might say feature, of a trading algorithm.

AG47

TrickyTree83 wrote: »

Sterling fell sharply in 6 minutes before recovering.

It's likely a bug, some might say feature, of a trading algorithm.

It's all to do with attacking DB

HornetSaver

TrickyTree83 wrote: »

Sterling fell sharply in 6 minutes before recovering.

It's likely a bug, some might say feature, of a trading algorithm.

The temporary plunge and the rapid 80% rebound masks the true, medium term picture though, which is that Sterling continues to weaken. The terrifying thing for me is that the lower the pound goes (I'm talking low stable levels, rather than blips like this), the higher inflation will go, and the more credible it is that the current hard-left Labour party could win in 2020.

Sure, that doesn't fit conventional political wisdom. But conventional political wisdom did not predict the Tories winning in 2015, the sheer scale of the SNP's gains in the general election, their subsequent failure - given those gains - to secure a Holyrood majority in 2016, or indeed the EU referendum outcome. So all you can do in these circumstances is look at where the main parties are now, and what the threats and opportunities are. Well, the threats to the Government are that they make a hash of Brexit, or that factors beyond their control bring inflation-adjusted take-home pay down.

The opportunities for Labour are in principle limited, but if things go badly over the next few years, who else are people going to vote for?

The xenophobic amateur boxers?

The Anglophobic people desperate to break the UK up?

The Europhile Lib Dems?

posh*spice

Jon_B wrote: »

One thing I'm constantly wondering and I don't profess to being an expert in economics is why are the media not talking up an interest rate rise in the U.K.?

Whilst devalued Sterling is great for exporters, we import far more and if this decline continues to go unchecked, inflation will be rampant in 2017.

Everytime the pound shows signs of strenghthing just watch the BoE slap it down - I guess it's because they are worried about our currebt avcount deficit.

posh*spice

HornetSaver wrote: »

The temporary plunge and the rapid 80% rebound masks the true, medium term picture though, which is that Sterling continues to weaken. The terrifying thing for me is that the lower the pound goes (I'm talking low stable levels, rather than blips like this), the higher inflation will go, and the more credible it is that the current hard-left Labour party could win in 2020.

Sure, that doesn't fit conventional political wisdom. But conventional political wisdom did not predict the Tories winning in 2015, the sheer scale of the SNP's gains in the general election, their subsequent failure - given those gains - to secure a Holyrood majority in 2016, or indeed the EU referendum outcome. So all you can do in these circumstances is look at where the main parties are now, and what the threats and opportunities are. Well, the threats to the Government are that they make a hash of Brexit, or that factors beyond their control bring inflation-adjusted take-home pay down.

The opportunities for Labour are in principle limited, but if things go badly over the next few years, who else are people going to vote for?

The xenophobic amateur boxers?

The Anglophobic people desperate to break the UK up?

The Europhile Lib Dems?

Don't worry no one will vote for Labour. How do I know? Because at 54 I and my DH have voted Labour all our lives and we won't vote Corbyn - I can't imagine we are alone.

Shakethedisease

TrickyTree83 wrote: »

Sterling fell sharply in 6 minutes before recovering.

It's likely a bug, some might say feature, of a trading algorithm.

The red arrow was the independence referendum 2014 'fall off a cliff' ( as it was termed at the time ).