Tagged with Sterling

It’s the country’s deficit not the government’s that matters – devalue to re-industrialise

Save our steelThe imminent crisis in what is still laughingly called the British steel industry is being greeted just as other similar developments have been for decades – with consternation and anger, with concern for the implications for social cohesion in general and for workers’ families in particular, but with no recognition that this is just the latest episode in what is now a depressingly long saga.

As one British industry after another has either passed into foreign ownership or closed down, or – as in the case of the steel industry – both, very few recognise that this is not just a one-off but is part of the long and not so slow de-industrialisation of Britain. Continue reading →

Thoughts on an independent Scotland’s currency

Scottish banknoteI am somewhat mystified by the argument from the Scottish National Party that in the event of Independence they want to keep a shared currency union with the UK. Although I have made no detailed study of the issue, I am surprised that after decades of arguing for Independence, the Scottish nationalists seem so under-prepared to give answers to some quite fundamental questions.

The disadvantages for the UK would be obvious, that the UK taxpayer would remain the guarantor of last resort for Scottish banks, while they would have no democratic constraint upon the regulation of those banks. Continue reading →

The pound in your pocket is lowering your living standards

The British pound has begun to fall once more on the international currency markets. It may be further helped on its way by the loss of the AAA credit rating. This will have important domestic economic consequences.

The currency is also being talked down by a number of officials, effectively including both the current governor of the Bank of England and his appointed successor. Their hope is that a weaker pound will boost Britain’s woeful export performance, and perhaps lead to a revival of business investment in the export-oriented sectors of the economy. Continue reading →