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Pound lower than the euro
Posted: Wed Mar 10, 2010 5:06 pm
by TomUK
I heard a financial expert(?) on BBC this morning suggesting that Britain's economy would be helped if the pound had parity with the euro, or even better, went lower than the euro. His reasoning was that a lower pound would aid Britain's export trade and thus boost the economy and aid economic recovery. I suppose it's a point of view and if expounded enough could catch on, but God knows what it would do to the tourist trade, as people are already complaining about food and drink in Spain and Portugal (for example) being pricier nowadays. I suppose we were spoilt in the escudo days and the days of 163 euros to the pound. I will not be put off coming to the Algarve by bar and restaurant prices creeping up - but I wonder if the pound dropping will put a lot of people off. A friend who has always favoured Portugal and Spain has now 'discovered' Turkey and Bulgaria where he says prices are considerably lower. Portuguese tourism was down last year - I hope this lower pound theory doesn't catch on, it could be another nail in the tourism coffin.
Re: Pound lower than the euro
Posted: Wed Mar 10, 2010 6:16 pm
by EMM
The so called experts keep putting forward this theory that a low £ is good for UK exports, well they actually fell last month ( so much for the benefits of a falling £ )
A low £ actually puts up the costs of almost everything we buy as apart from from those manufactured goods we import ALL commodities. metals fuels are dollar priced so these costs to UK manufacturers and consumers rise as well.
I am having to deal with a 8% rise this month in metals with more forcast.
A low £ is helping the stockmarket as those companies with overseas earnings are seeing more £ when converted back.
As for " cheaper "destinations I have seen reports of 40% rises in hotel and other costs in Turkey as they take advantage also of the low £ and increased business from the Eurozone.
There were experts !! in the weekend press forcasting E1.25- E1.40.
What do any of them know, they are the same people who run the banks and other financial institutions and got us into this mess in the first place.
Re: Pound lower than the euro
Posted: Wed Mar 10, 2010 6:35 pm
by TomUK
EMM wrote:
What do any of them know, they are the same people who run the banks and other financial institutions and got us into this mess in the first place.
Couldn't have put it better myself!
Re: Pound lower than the euro
Posted: Wed Mar 10, 2010 10:08 pm
by Matryx
Don't forget Gordon Brown, he's played a pretty significant part in all this! Can you imagine the mess the UK would be in if we'd have joined the Euro
Re: Pound lower than the euro
Posted: Thu Mar 11, 2010 9:04 am
by EMM
If we had joined the Euro our imports would cost less, the financial institutions would have more confidence in the Euro as it would have anothe of the worlds major economies as part of it.
The EU banking rules would have limited some of the excess of our Banks.
What labour ( since being elected ) did was to give the Banks far too much freedom which allowed them to take on an unacceptable level of risk.
But it was the banks who did it.
What labour has also done ( which almost every major western economy has also done ) was to dramatically increase the public sector.
Without which ( because we no longer have a significant manufacturing sector ) unemployment would have rocketed.
Public finances are run on borrowed money, the bigger the public sector the more you need to borrow.
Plus the huge rise in the level of benefits.
None of this has anything to do with the Euro
Re: Pound lower than the euro
Posted: Thu Mar 11, 2010 3:50 pm
by cereza
EMM wrote:If we had joined the Euro our imports would cost less, the financial institutions would have more confidence in the Euro as it would have anothe of the worlds major economies as part of it
I doubt that about the confidence EMM - not with our debt!
They would be talking about PIGISUK
With our huge debt and poor economy we will just have to get used to a weak Pound
Re: Pound lower than the euro
Posted: Thu Mar 11, 2010 4:39 pm
by EMM
THe £ has fallen against every currency even the Euro ( -25% ), if we had gone in at E1.30 we would have to face only the fall of the Euro .
I can,t see how the UK has benefited by going alone. what have we gained ??
Re: Pound lower than the euro
Posted: Thu Mar 11, 2010 11:45 pm
by Bristle Si
EMM wrote:THe £ has fallen against every currency even the Euro ( -25% ), if we had gone in at E1.30 we would have to face only the fall of the Euro .
I can,t see how the UK has benefited by going alone. what have we gained ??
You can't have a single currency without a common fiscal policy to sit alongside and Europe does NOT have that - and that is part of the reason why some of the Euro nations have problems, like the 'PIGS'.
Admittedly the £ is looking pretty sick again, but to suggest everything would be better if the UK was in the Eurozone is not true. Other nations are struggling with the restrictions of being in the Eurozone. No simple solution at the mo; the markets and world economic situ will just have to run its course.
Re: Pound lower than the euro
Posted: Fri Mar 12, 2010 9:54 am
by EMM
It appears that in response to their own crisis the Greeks have rasied VAT and a range of other taxes which are expected to impact on tourism in Greece.
Lets hope that the changes in Portugal are less and that Portugal benefits from the problems of others.
Re: Pound lower than the euro
Posted: Fri Mar 12, 2010 10:09 am
by cereza
I think it's a fair bet that Portugal will also be raising taxes and taking other such actions so there will not be much difference.
One of Portugals problems at the moment is that the government is not a strong one which exacerbates the difficulties of taking remedial action and gives an example of why the markets have such fears of a hung parliament here in the UK.
Re: Pound lower than the euro
Posted: Fri Mar 12, 2010 7:24 pm
by Matryx
EMM wrote:If we had joined the Euro our imports would cost less, the financial institutions would have more confidence in the Euro as it would have anothe of the worlds major economies as part of it.
The EU banking rules would have limited some of the excess of our Banks.
What labour ( since being elected ) did was to give the Banks far too much freedom which allowed them to take on an unacceptable level of risk.
But it was the banks who did it.
What labour has also done ( which almost every major western economy has also done ) was to dramatically increase the public sector.
Without which ( because we no longer have a significant manufacturing sector ) unemployment would have rocketed.
Public finances are run on borrowed money, the bigger the public sector the more you need to borrow.
Plus the huge rise in the level of benefits.
None of this has anything to do with the Euro
Re: Pound lower than the euro
Posted: Fri Mar 12, 2010 7:30 pm
by Matryx
A single currency across all of these diverse countries and economies within Europe will never work in the long-term without full fiscal and politcal integration. Even then, I cannot see how you can have common policies that fit each individual countries economic circumstances, it just doesn't fit. It's different in the USA, as they pretty much started like that, but to force these ancient and very different countries economies together is a recipe for disaster. What was wrong with the original plan of economic cooperation, why go any further? Perhaps the fat cats in Brussells could answer that one?
Re: Pound lower than the euro
Posted: Fri Mar 12, 2010 7:32 pm
by Gary/Gaynor
Matryx
OK so you can copy a quote
Pray tell what is your point
Gary
Re: Pound lower than the euro
Posted: Fri Mar 12, 2010 7:38 pm
by Gary/Gaynor
Sorry Matryx
Looks like our comments crossed the wire together ...
Now I see your point
I think we will always have our Island mentality be it good or bad we still think we are a World player but maybe its time to pull our horns in. Im sure we would be a lot better off .. Anyway it may happen a lot sooner than most people think.
Gary
Re: Pound lower than the euro
Posted: Fri Mar 12, 2010 9:09 pm
by EMM
There are ony 4 currencies of any real importance, YEN, YUAN, DOLLAR and EURO, the £ will soon be in the same basket as the peruvian sol, the egyptian £, turkish Lira etc.
It is only a matter of time.