According to Larry Elliott, the Guardian's Economics Editor, 'sterling has been flying too high to long - a fall will bring us back to earth'. All the factors that have ensured the pound's strength over the past ten years will go into reverse. Whilst a lower pound is no magic answer for exports it will 'help to start the long overdue rebalancing of the economy.' The financial markets were given a shock before Christmas when balance of payments data was released showing that Britain's current account deficit was proportionately just as big as that in the United States at 5.7% of GDP in the three months to September 2007. Investment income was never going to fill the gap in the current account left by the decline of manufacturing exports.
http://www.guardian.co.uk/business/2008/jan/07/economy.sterlingrate
No comments:
Post a Comment