Brexit: The pound in my pocket is an ounce


#1

Six months ago I’d get about 1.25-130 Euros for my Pound Sterling. Today, 1.10. That’s a 20% drop.

Same goes for US dollars.

You can see it on these charts:
https://www.oanda.com/solutions-for-business/historical-rates/main.html

So it’s becoming clear. Currency traders - as a proxy for the world at large - consider Brexit to be a damning influence on the UK’s economy.

What next? This is the risk: Marmite. We’ve seen it, hohoho, as supermarkets argue with their suppliers about who will carry the can for the foreign exchange driven increase in prices. Should the supplier reduce their prices in Pounds Sterling, or should the supermarket increase prices to the consumer?

We all know who gets stiffed in the end here. The consumer.

So then inflation is going to go up - fast. But here’s a subtle distinction of the modern world: Even if a product is made in the UK and sold in the UK - if it is owned by a company that reports their earnings in a foreign currency, well hey - they are obliged to push the prices up to keep pace. So no let-up there.

What happens when inflation rises? All together now - interest rates go up! Even though every economist can recognise the disassociation that means increased interests rates have no impact on the price of foreign goods in the short to medium term (and frankly, probably, in the long term too) - even though, they will be increased as the politicians freak out and look for familiar blankets to comfort themselves with and save the party.

Interest rates up … housing price crash as people dump their properties, accumulated over the last many years of ultra-low mortgage costs.

That crashes whatever wealth people have built up, and is a disaster.

Again. For Britain. Buggger.


#2

No it isn’t.


#3

True. Feels like it. 16% down for the dollar at the moment. Pretty bloody significant, no? Wouldn’t you say?

Point stands. Sterling is nose-diving.

How it matters? Simple things - replacing my 7 year old laptop - not going to happen. It’s an issue as the poor thing stopped accepting OSX upgrades some time back, and my work needs me up to date.

USA - sell your old laptops to people in the UK!


#4

Man, you really know how put this in perspective.


#5

Heh.

When this all kicks in properly, if it gets as bad as it can be, we’ll have to switch to relying on Commonwealth countries for trade.

Have you any idea what it will mean, being forced to eat Vegemite?


#6

You know what? The UK should just adopt the US $.

There. I said it.


#7

Sure; a 15.3% drop in the UKP relative to the Euro in this span of time is huge; it just isn’t 20%.

OTOH, the Euro was originally pegged to the ECU, which was around $1.15 when its conversion happened, the Euro soon dropped to around $0.80 (though of course later rose again). Makes the pound’s drop look minor by comparison.

I’ve been following this on the BBC. The obsession with marmite as the standard is amusing. Less amusing is your ministers saying they don’t care about inflation, and simply weird is the fact that your biggest national news yesterday was not this but rather a dog-biting incident. How is that national news?


#8

I’m so pleased I got out of Britain before this. Getting paid in dollars seems like a good deal right now, too.

I never knew a Britain that wasn’t in the EU and I don’t want to. I don’t recognize this new, insular attitude and I want no part of it.

Of course, my UK pensions get more and more worthless by the second.


#9

I’m itching to follow you. Literally, it’s going to the dogs. Again.


#10

The reporting media don’t like upsetting the establishment.

While CityAM (financial news) shouted ZOMG POUNDS FALLZ, the BBC said GOLLY CHAPS POUND RECOVERED (*a bit, after it fell, wot).

Now - don’t worry about anything. Mr Carney says it’s all going to be ok, though if it goes down the pan, it’s not his fault. Clear?

Carry On then.

What a fucking lampoon.


#11

Of course, the lack of an utter collapse as yet has nothing to do with the fact that Brexit hasn’t happened yet…

I see Scotland is thinking about having another go at the whole independence thing, too. And who can blame them?


#12

The Scots must be looking south and asking wtf happened. Beyond belief.


#13

But I found this:

and it’s making me feel better.


#14

I thought the topic title was referring to pot at first.


#15

That’s about all it’s going to buy anyone soon! But no imported stuff. That’s gonna be dollars only.


#16

You have to relax somehow when your entire country just shit the bed.

God only knows what’s going to happen here in the States after this coming election, so I’m not one to talk.


#17

Doesn’t explain how “dog bites man” became the biggest story in the country.

Thank god HIGNFY is back.


#18

Today’s BBC headline is :slight_smile::

Coronation Street star Jean Alexander dies aged 90
http://www.bbc.co.uk/news/entertainment-arts-37662724

Soap star dies.


#19

Was she bitten by a dog?

ETA: just turned on the BBC morning news show. There she is, lead story. Sheesh.


#20

The Scots have been looking South and asking WTF happened for centuries now…

“We’re in a kingdom with whom?! That’s just not right!”