Anyone else concerned about the fall in sterling?

[Jon277]

Another record low today for sterling

this and other recent articles by fairly serious commentators
http://www.economicsuk.com/blog/ - SLUMP IN STERLING AND GILTS REVEALS MARKETS' FEARS FOR THE UK

I have little faith in this new cabinet making the right calls - I suspect we will get reheated Thacherism of the 1980s regardless of the situation. Combined with the ongoing inability to do anything to lessen the impact of Brexit.


Jon

[SalvorHardin]

It's dollar strength, rather than sterling weakness. The Euro has been similarly hit in the last few months.

As to being worried, not me. Most of my money is in American and Canadian companies, plus British multinationals and international investment trusts.

We're a country with a persistent current account deficit, so we have to sell off assets. Our currency has been in decline since 1945. I've just got back home from an afternoon on the pop with people who remember when you could get $4 for £1

[ursaminortaur]

It's dollar strength, rather than sterling weakness. The Euro has been similarly hit in the last few months.

As to being worried, not me. Most of my money is in American and Canadian companies, plus British multinationals and international investment trusts.

We're a country with a persistent current account deficit, so we have to sell off assets. Our currency has been in decline since 1945. I've just got back home from an afternoon on the pop with people who remember when you could get $4 for £1

They must be getting on a bit then since the last time it was at that level was September 1949

https://www.exchangerates.org.uk/articles/1325/the-200-year-pound-to-dollar-exchange-rate-history-from-5-in-1800s-to-todays.html

In September of 1949, speculation became fact when at the time Chancellor of the Exchequer, Sir Stafford Cripps, announced a 30% devaluation for the Pound, reducing the Pound-to-Dollar rate from $4.03 to $2.80.

[SalvorHardin]

I see that my reply has been deleted. What is it that TLF have against [expletive deleted] * football club?

Or is it taking offence that my mother was on the pop with us and that she remembers when you could get $4 to the £1

* The club otherwise known as The Gunners

Good job I didn't mention Scunthorpe!

[Clariman]

I see that my reply has been deleted. What is it that TLF have against [expletive deleted] * football club?

That particular post was deleted because it was completely off topic.

[SalvorHardin]

I see that my reply has been deleted. What is it that TLF have against [expletive deleted] * football club?

That particular post was deleted because it was completely off topic.

No problem.

So long, and thanks for all the fish

[scotia]

With today’s announcement of the plunging pound to dollar ratio. I thought that it might be interesting to see how this ratio has fared over the governments of the last forty-three years.

The Conservative government elected on 4/5/1979 started with a 2.08 pound to dollar ratio. This increased to 2.45 by November 1980, but then went on a downward spiral, reaching 1.05 by February 1985. But back it climbed to 2.0 in February 1991, before falling back to 1.42 in February 1993, and modestly recovering to 1.62 at the changeover to Labour in 2/5/1997

The Labour Government started with a ratio of 1.62 in May 1997, which drifted down to 1.4 by November 2000, before climbing back to 2.11 by November 2007. Then came the financial crisis of 2008, and the exchange rate dropped to 1.37 in January 2009, before recovering to 1.5 at the change over to the Conservative /Liberal coalition on 11/5/2010.

The Conservative/Liberal government started with an exchange ratio of 1.5 in May 2010. It increased to 1.72 by July 2014 but fell back to 1.55 at the changeover to the Conservatives on 8/5/15.

The Conservative government started with an exchange rate of 1.55 on May 2015. It drifted downwards to 1.22 by October 2016, but recovered to 1.43 by April 2018, before falling to today’s value of 1.14.

Looking over these numbers – I am astonished at how significantly the exchange rate has varied. I remember well the Wilson/Callaghan devaluation of 1967 – which was considered a major defeat for the Labour government. And yet the devaluation was only 14%. Hardly noticeable compared to current exchange rate fluctuations.

The data was taken from https://www.macrotrends.net/2549/pound- ... ical-chart – using the download button to supply a spreadsheet.

[absolutezero]

I see that my reply has been deleted. What is it that TLF have against [expletive deleted] * football club?

That particular post was deleted because it was completely off topic.

No problem.

So long, and thanks for all the fish

Great move, Clariman.
One of the most useful investment/economic posters and he's decided to call it a day based on heavy handed moderation.
Well done.
*Slow clap*

[77ss]

It's dollar strength, rather than sterling weakness. The Euro has been similarly hit in the last few months.

As to being worried, not me. Most of my money is in American and Canadian companies, plus British multinationals and international investment trusts.

We're a country with a persistent current account deficit, so we have to sell off assets. Our currency has been in decline since 1945. I've just got back home from an afternoon on the pop with people who remember when you could get $4 for £1

Indeed - growing up in London, I remember that popular slang for the half crown piece was 'half a dollar' (ie $4 to the £).

Am I worried? No. Partly because my investments are diverse, partly because a weak £ will give me higher dividends but largely because I don't see anything much I can sensibly do about it. Suggestions gratefully received.

Worried for the country - somewhat, yes. But I didn't vote for the current shambles or for Brexit. Barring direct action what does one do? If I were younger emigration would be tempting.

I am reminded of the old song - 'they call it democracy and laugh in your face'.

[Clariman]

I see that my reply has been deleted. What is it that TLF have against [expletive deleted] * football club?

That particular post was deleted because it was completely off topic.

No problem.

So long, and thanks for all the fish

Great move, Clariman.
One of the most useful investment/economic posters and he's decided to call it a day based on heavy handed moderation.
Well done.
*Slow clap*

The thread came to my attention because of an attack on another poster which included more than one [expletive deleted]. That post clearly broke more than one site rule so it was deleted. A reply to that post was also deleted. That left his off topic post which was still playing with the expletive deleted as well as being off topic.

He is very welcome to stay but the rules of the site are there for the benefit of all posters, to keep the discussion respectful. Intriguing that he asked why the off topic post was deleted. Clearly he knows perfectly well why his other post was deleted. No warnings were issued - just the removal of an abusive post and of an off topic post. Nothing to see here.

We don't make exceptions to the site's rules based on people's popularity, valued contributions or position. If an Admin swears or attacks someone their post will.get deleted.

Hope this context explains the actions taken.

All the best
Clariman

[88V8]

Another record low today for sterling

.....SLUMP IN STERLING AND GILTS REVEALS MARKETS' FEARS FOR THE UK

Record since when? I remember it at $1.1.
I also remember $2.4.

Many countries have increased their borrowing. And if the lenders don't lend to us, then to whom?

That said, this splurging and govt debt is not at all to my liking.

V8

[NotSure]

..... Let's face it though, do they really need to go through the issuing debt thing? If they really wanted to, they could just fund the crisis directly.

Do you mean more QE?

[CliffEdge]

As I said before, a run on the pound. Balance of payments crisis, UK going to the IMF with a begging bowl. Obvious consequences of Brexit.
Compelled by IMF to rejoin the EU and the Euro.
The Truss dalek appears to have failed already. Must be a record in stupidity.

[Dod101]

As I said before, a run on the pound. Balance of payments crisis, UK going to the IMF with a begging bowl. Obvious consequences of Brexit.
Compelled by IMF to rejoin the EU and the Euro.
The Truss dalek appears to have failed already. Must be a record in stupidity.

Can you not kindly remove Brexit from your arguments? It is done, gone, fini. Understand?

Since when, anyway, did the IMF compel any country to do anything?

Dod

[CliffEdge]

As I said before, a run on the pound. Balance of payments crisis, UK going to the IMF with a begging bowl. Obvious consequences of Brexit.
Compelled by IMF to rejoin the EU and the Euro.
The Truss dalek appears to have failed already. Must be a record in stupidity.

Can you not kindly remove Brexit from your arguments? It is done, gone, fini. Understand?

Since when, anyway, did the IMF compel any country to do anything?

Dod

There's compel and compel. But okay I won't mention brexit again.

[1nvest]

As I said before, a run on the pound. Balance of payments crisis, UK going to the IMF with a begging bowl. Obvious consequences of Brexit.

April 2022 monthly inflation was near a 30% annualised rate, Pound declined 10%

ONS CPI figures ...
2022 MAR 116.5
2022 APR 119.0

Obviously the markets saw UK issues in April 2022, but where the Pound declining 'only' 10% was reflective that the market wasn't anticipating that the ongoing/headline 30% annualised rate of inflation wasn't going to be sustained and instead that forward annualised inflation would be more around 10%. Since end of March to end of July (latest ONS data), there was around 4% inflation (a third of the way into a forward year) 12.5% annualised if that were to continue. All relative to the market view back at the end of April.

That localised 30% annualised rate April 2022 spike - was predominately 'obviously' down to other factors than Brexit.

July figures indicate a 7% annualised rate

2022 JUN 120.5
2022 JUL 121.2

a 0.58% monthly increase in consumer prices, compared to a 8.3% annualised rate in June ... i.e. inflation at the end of July was seen to be slowing, and the Pound decline slowed to flat-lining across that month.

In August the Pound decline from 1.22 USD to 1.16 USD, a 5% decline in a month, so the markets are again making negative side forward projections. Again more likely for other factors than Brexit. Perhaps political uncertainty. That the Pound hasn't bounced is indicative that the markets opine that Truss being elected PM wasn't a positive factor for the UK i.e. her election alone is a cost to the UK population rather than a benefit, and the markets are signalling quite a high cost. Yet other forward predictors are suggesting much deeper cost to yet come, potential Pound parity with the USD. Which given her indications so far, is quite a reasonable projection IMO (not restraining excessive energy firm profits/cost to consumers - and instead opting to also throw out a £17Bn tax break to firms - including energy firms). Economic madness, but where I opine she isn't actually mad, just potentially a imbecile.

Damage either way, but better would have been to restrict gas sourced out of the UK from leaving the UK, and further restrict that gas to being sold to UK customers at a fair price rather than the obscene price that the global markets are bidding gas prices up to. The assumption that one comes to is that Truss must have some personal incentive to not only sustain energy firms excessive profits, but also to bolster them with generous tax breaks. Which would also obviously not make her neither mad nor imbecilic - but certainly a enemy of the peoples best interests.

[CliffEdge]

As I said before, a run on the pound. Balance of payments crisis, UK going to the IMF with a begging bowl. Obvious consequences of Brexit.

April 2022 monthly inflation was near a 30% annualised rate, Pound declined 10%

ONS CPI figures ...
2022 MAR 116.5
2022 APR 119.0

Obviously the markets saw UK issues in April 2022, but where the Pound declining 'only' 10% was reflective that the market wasn't anticipating that the ongoing/headline 30% annualised rate of inflation wasn't going to be sustained and instead that forward annualised inflation would be more around 10%. Since end of March to end of July (latest ONS data), there was around 4% inflation (a third of the way into a forward year) 12.5% annualised if that were to continue. All relative to the market view back at the end of April.

That localised 30% annualised rate April 2022 spike - was predominately 'obviously' down to other factors than Brexit.

July figures indicate a 7% annualised rate

2022 JUN 120.5
2022 JUL 121.2

a 0.58% monthly increase in consumer prices, compared to a 8.3% annualised rate in June ... i.e. inflation at the end of July was seen to be slowing, and the Pound decline slowed to flat-lining across that month.

In August the Pound decline from 1.22 USD to 1.16 USD, a 5% decline in a month, so the markets are again making negative side forward projections. Again more likely for other factors than Brexit. Perhaps political uncertainty. That the Pound hasn't bounced is indicative that the markets opine that Truss being elected PM wasn't a positive factor for the UK i.e. her election alone is a cost to the UK population rather than a benefit, and the markets are signalling quite a high cost. Yet other forward predictors are suggesting much deeper cost to yet come, potential Pound parity with the USD. Which given her indications so far, is quite a reasonable projection IMO (not restraining excessive energy firm profits/cost to consumers - and instead opting to also throw out a £17Bn tax break to firms - including energy firms). Economic madness, but where I opine she isn't actually mad, just potentially a imbecile.

Damage either way, but better would have been to restrict gas sourced out of the UK from leaving the UK, and further restrict that gas to being sold to UK customers at a fair price rather than the obscene price that the global markets are bidding gas prices up to. The assumption that one comes to is that Truss must have some personal incentive to not only sustain energy firms excessive profits, but also to bolster them with generous tax breaks. Which would also obviously not make her neither mad nor imbecilic - but certainly a enemy of the peoples best interests.

I have promised not to mention brexit for a while at least but before I go

The biggy is that the Truss dalek has strongly signalled a total blindness to (well, many things, peering down that long thin tube you don't see the big picture) the damage caused by cutting the UK off from the EU and the likelihood that she will do nothing to change that. Meaning a wait of two years before a change of government. A new government which will try to repair some of the damage but is likely to cause significant other anti-capitalist mayhem.

[gryffron]

I have promised not to mention brexit for a while at least but before I go

Yes, it must be hitting the eurozone hard, because euro well down against the dollar too. Or alternatively it could be the usual flight-to-the-dollar which:
a) Always happens in times of crisis.
b) Fed pushing up interest rates much faster than Uk/euro.

Gryff

[dealtn]

Must be a record in stupidity.

Saying the same thing repeatedly with such conviction without evidence it has happened, or will happen, must run it close though?

[77ss]

As I said before, a run on the pound. Balance of payments crisis, UK going to the IMF with a begging bowl. Obvious consequences of Brexit.
Compelled by IMF to rejoin the EU and the Euro.
The Truss dalek appears to have failed already. Must be a record in stupidity.

Can you not kindly remove Brexit from your arguments? It is done, gone, fini. Understand?

Since when, anyway, did the IMF compel any country to do anything?

Dod

For good or for evil, the consequences of Brexit are going to be with us for a very long time.

I can understand that some may be just fed up with it, but any attempt to sweep all comment under the carpet is shallow.