Like F1 “fans” waiting for a car crash, international investors are watching to see who loses its AAA credit rating first – the United Kingdom or United States. Both countries have huge budget deficits and high debt: so which will be stripped of its top rating, or will both be downgraded?
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In the month the pound fell below $1.50 on the currency exchanges, remember that 25 years ago sterling sunk to $1.03. In 1985 Britain worried about parity with the dollar, not parity with the euro, and compared with old-fashioned sterling crises, we ain’t seen nothing yet.
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The euro is tumbling against the dollar as Greece’s financial problems threaten the whole eurozone. Why then is the pound tumbling too?
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When is a dividend increase not an increased dividend? When the company denominates its dividends in dollars but pays them to UK investors.
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Does the bank of England have a secret policy to devalue the pound? It’s being highly successful if it has.
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If the bad news is that oil is back over $60 a barrel, that rise is also the good news too. While it puts pressure on costs, the price increase is also telling us the recession is ending.
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The UK is suffering from global problems, the government constantly says. Well in that case, how come Britain has a record trade deficit and a falling currency?
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Nevermind whether comments from Conservative shadow chancellor George Osborne can move sterling, who is in charge of looking after Britain’s currency? When the Bank of England was made independent, managing the exchange rate fell through the cracks.
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