18-12-2008
Pound in a rout, not devaluation
| Recent depreciation of UK pound against euro has gone well beyond compettitive readjustment. UK service based economy cannot live with such a weak currency. Either UK representative must speak or intervene in favour of the currency, or as a apart of the market is betting, communicate plans to join euro. This situation does not benefit either UK or contintental Europe.It is utterly unconceivable to let a currency of such an important economy drop 10% in a week agaunst euro, especially given recent data coming from continental Europe, that show comparable weaknesses between the two blocks. |