stuckmojo Posted April 11, 2008 Share Posted April 11, 2008 I noticed how over the last couple of days the media started to report the fall of GBP against the Euro. Faisal Islam made a decent report of it in yesterday's C4 news, also explaining how this is NOT necessarily good news for manufacturing, as commodity and raw material prices get more expensive with the pound depreciation. I have the feeling that HPC has become a huge source of info for the journos. Can't blame them really, we've been right all along. Quote Link to comment Share on other sites More sharing options...
General Melchett Posted April 11, 2008 Share Posted April 11, 2008 I noticed how over the last couple of days the media started to report the fall of GBP against the Euro. Faisal Islam made a decent report of it in yesterday's C4 news, also explaining how this is NOT necessarily good news for manufacturing, as commodity and raw material prices get more expensive with the pound depreciation.I have the feeling that HPC has become a huge source of info for the journos. Can't blame them really, we've been right all along. And yet pretty much none of them have yet made the link to interest rates - you still et them all going on, unreservedly, about how interest rate cuts= good, without balancing their reports with the downside (savers screwed, [solvent] industry screwed, inflation screwed, currency screwed....) Quote Link to comment Share on other sites More sharing options...
Justice Posted April 11, 2008 Share Posted April 11, 2008 Did you notice that the guy thet interviewed said nothign about wages going up ? Immigration is keeping wages down it plane and simple Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted April 11, 2008 Author Share Posted April 11, 2008 yes. absolutely. The picture he portraited was rather grim: -No more cheap holidays -Rate cuts NOT passed to borrowers -no real advantage for manufacturers. I think that in the media people are realising that the only way to keep readers/viewers is to ride the wave. as always. This time around it's the doom wave. Quote Link to comment Share on other sites More sharing options...
Sofa Spud Posted April 11, 2008 Share Posted April 11, 2008 Falling house prices and pound falling against the Euro? When the HPC bottoms out, will Europeans be flocking to buy up our empty BTLs, or will Britain have adopted the Euro by then? I think we might do so if and when it reaches parity, since that would appear to be easier, with no conversion rate to worry about. Quote Link to comment Share on other sites More sharing options...
ParticleMan Posted April 11, 2008 Share Posted April 11, 2008 Falling house prices and pound falling against the Euro? When the HPC bottoms out, will Europeans be flocking to buy up our empty BTLs, or will Britain have adopted the Euro by then? I think we might do so if and when it reaches parity, since that would appear to be easier, with no conversion rate to worry about. Worry about growth rate, not conversion rate. Particularly Spain's. Quote Link to comment Share on other sites More sharing options...
sunonmars Posted April 11, 2008 Share Posted April 11, 2008 Well i've certainly noticed it, normally, the Rate out here in Turkey is about 2.75 lira to £1 by now, its just cracking 2.55 and can't seem to climb at all to where it should be. Quote Link to comment Share on other sites More sharing options...
yawnIHateSundays Posted April 11, 2008 Share Posted April 11, 2008 Yep, just walked past Thomas Cook and the rate offered was a mere 1.17 / £. It's going to hit people on holiday hard this summer. Quote Link to comment Share on other sites More sharing options...
Monkey Posted April 11, 2008 Share Posted April 11, 2008 Yep, just walked past Thomas Cook and the rate offered was a mere 1.17 / £.It's going to hit people on holiday hard this summer. bloody hell when i went ot italy last september i was buying from the post office at £1.43 wont be long before its £1-1 or less? Quote Link to comment Share on other sites More sharing options...
The Ayatollah Buggeri Posted April 11, 2008 Share Posted April 11, 2008 Not good news for the tourist industry in northern France and the Costa del Hell... Quote Link to comment Share on other sites More sharing options...
Gel Posted April 11, 2008 Share Posted April 11, 2008 I have a hunch the Euro strength won't last forever. It can't really lets face it with Ireland, Italy, Spain and the Netherlands taking a kicking. Even if Germany and France are the puppeteers, if they aren't careful the Euro will cease to exist as each country finds they are better off with a seperate currency. Every member state that joined the Euro found their actual cost of goods went up. The UK is however taking a kicking right now and it hasn't really even shown up in the mainstream economy yet, which is worrying as it shows it might have a way to fall yet. Quote Link to comment Share on other sites More sharing options...
huw Posted April 11, 2008 Share Posted April 11, 2008 (edited) I noticed how over the last couple of days the media started to report the fall of GBP against the Euro. Faisal Islam made a decent report of it in yesterday's C4 news, also explaining how this is NOT necessarily good news for manufacturing, as commodity and raw material prices get more expensive with the pound depreciation. But it is good news for manufacturing, particularly export manufacturing. Sure, raw materials and energy costs will go up when measured in pounds, but so will the corresponding price element of the exported goods. In other words: pay more out to buy raw materials, recoup the cost when selling the finished goods. However a weaker pound means that the value added by UK labour will be cheaper (provided that wages can be kept down, which will happen one way or another in the long run). Don't forget that manufacturing is largely about the part I italicised. It's not (or shouldn't be) about commodities trading. A weak pound will also help with our trade imbalance from the other side, by reducing demand for imports and foreign holidays. If a weak currency is not good news for manufacturing and exports, why has China kept its currency artificially low for so long, and why have they enjoyed an unrivalled export boom during this period? Conversely, why were UK exporters (and media) howling when the pound was being boosted by North Sea oil in the early 1980s? Edited April 11, 2008 by huw Quote Link to comment Share on other sites More sharing options...
OldGreg Posted April 11, 2008 Share Posted April 11, 2008 But it is good news for manufacturing, particularly export manufacturing. Sure, raw materials and energy costs will go up when measured in pounds, but so will the corresponding price element of the exported goods. In other words: pay more out to buy raw materials, recoup the cost when selling the finished goods. However a weaker pound means that the value added by UK labour will be cheaper (provided that wages can be kept down, which will happen one way or another in the long run). Don't forget that manufacturing is largely about the part I italicised. It's not (or shouldn't be) about commodities trading.A weak pound will also help with our trade imbalance from the other side, by reducing demand for imports and foreign holidays. If a weak currency is not good news for manufacturing and exports, why has China kept its currency artificially low for so long, and why have they enjoyed an unrivalled export boom during this period? Conversely, why were UK exporters (and media) howling when the pound was being boosted by North Sea oil in the early 1980s? Aren't the exported goods cheaper to buy? That's why it boosts exports. It's the increased volume of sales due to being more competitive that gets a boost. Quote Link to comment Share on other sites More sharing options...
MSWHPC Posted April 11, 2008 Share Posted April 11, 2008 Falling house prices and pound falling against the Euro? When the HPC bottoms out, will Europeans be flocking to buy up our empty BTLs, or will Britain have adopted the Euro by then? I think we might do so if and when it reaches parity, since that would appear to be easier, with no conversion rate to worry about. thats rather lazy! like waiting for your house to be worth £1 as its a nice easy number! Quote Link to comment Share on other sites More sharing options...
Wlad Posted April 11, 2008 Share Posted April 11, 2008 when i went ot italy last september i was buying from the post office at £1.43 the post office tends to offer better rates anyway. Quote Link to comment Share on other sites More sharing options...
huw Posted April 11, 2008 Share Posted April 11, 2008 Aren't the exported goods cheaper to buy? That's why it boosts exports. It's the increased volume of sales due to being more competitive that gets a boost. Exactly. Imports get more expensive and exports get cheaper, meaning the balance of trade improves (and it needs to!) The original report is correct in saying that imported raw materials get more expensive, but where they are re-exported as manufactured goods then the overall effect should be broadly neutral. The difference then comes in the cost of adding value within the UK. Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted April 11, 2008 Share Posted April 11, 2008 the post office tends to offer better rates anyway. Haven't tried the Post Office, M&S are normally very good. Quote Link to comment Share on other sites More sharing options...
huw Posted April 11, 2008 Share Posted April 11, 2008 thats rather lazy!like waiting for your house to be worth £1 as its a nice easy number! It's also strange how all those other countries managed to join at non-parity rates, I guess they must be better at sums than us Brits Still, I'm sure the ECB will waive all its usual join-up rules (convergence, currency stability, contributions to central bank reserves etc) just as soon as we reach parity. We need to make sure we don't leave it too late, though; if the pound falls to 0.99 euro then the golden opportunity of 1:1 may have been lost forever and we'll be stuffed Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted April 11, 2008 Share Posted April 11, 2008 the post office tends to offer better rates anyway. http://www.postoffice.co.uk/portal/po/fore...requestid=45544 1.21 Euros at the moment in the post office Haven't tried the Post Office, M&S are normally very good. Used to use the Post Office but now use M&S for small amounts of Euro cash. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted April 12, 2008 Share Posted April 12, 2008 Just heard the traveling talking head on BBC News use the term Hyperinflation with regard to holiday makers as they've lost 20 Euros for every £100 compared to last year. He then went on to say it could get worse and the only way to ease the pain is try to find somewhere where the pound is still respected Quote Link to comment Share on other sites More sharing options...
Ponzi Posted April 12, 2008 Share Posted April 12, 2008 On sorting our trade deficit - watchout! US trade deficit actually increased despite dollar deval. See Warren Buffet's (exteremely entertaining and informative) letter to investors: Page 17 on US deficit. http://www.berkshirehathaway.com/letters/2007ltr.pdf Also, Germany pre Euro had a consistant surplus despit a strong Mark - how so? Simple, they were TWICE as productive as everyone else. Deval is a fools solution IMHO. Quote Link to comment Share on other sites More sharing options...
Sinking Feeling Posted April 12, 2008 Share Posted April 12, 2008 I noticed how over the last couple of days the media started to report the fall of GBP against the Euro. Faisal Islam made a decent report of it in yesterday's C4 news, also explaining how this is NOT necessarily good news for manufacturing, as commodity and raw material prices get more expensive with the pound depreciation.I have the feeling that HPC has become a huge source of info for the journos. Can't blame them really, we've been right all along. I and other have been repeating this point ad infinitum. I wouldn't be at all surprised if we start to see regular snippets of these threads appearing in the media! Quote Link to comment Share on other sites More sharing options...
winkie Posted April 12, 2008 Share Posted April 12, 2008 Haven't tried the Post Office, M&S are normally very good. Or hole in the wall with your NWide flex card. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.