The sterling effective exchange rate is one reason why the UK has recorded the highest inflation rate of any advanced economy.
With the onset of the crisis, the Bank of England allowed sterling to depreciate dramatically in 2008-9.
The depreciation was supposed to spur export led growth, and eventually dig the UK economy out of its current hole.
It hasn't happened. Instead, import prices rose, living standards fell, while the economy has flat-lined for almost five straight years.
4 comments:
Richard Littlejohn makes an interesting point about crime trends:
-sheep rustling
-metal thefts
-shoplifting
This is what happens in poor countries.
Export led growth is what happens when you have something to export!.
Our key industry is finance and there does not seem to be much demand for that at the mo!.
If you crush manufacturing and the extractive industries, and abandon farming/fishing to the EU, then what can you expect.
I blame [please insert here].
Inflation is the cruellest and most destructive tax. And it does not solve the prtoblem...
what bit of manufacturing we have is largely owned overseas, so profit disappears overseas. The UK economy doesn't get much gain as the transfer price set by head office ensures tax is not payable here so we only get the income tax from the workers.
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