The news that the pound has fallen on the foreign exchanges, takes me back to my very unsuccessful stint in the foreign exchange department of Bank of America. It was the 1980’s and the dealers were gods without a sentimental bone in their body. Some refused to read the papers because it might alter their judgement on what to bet on. They bought and sold currencies with complete ruthlessness and made a lot of money as a result.
The reason the pound is now falling against the euro and the dollar is simple, those dealers heirs are convinced that things are worse in the UK than elsewhere. Even the prospect of higher interest rates from the Bank of England makes little difference.
Nowhere else in the world has all the problems created by covid AND Brexit as well. Shortages push up prices and limit growth, a falling pound means foreigners think the UK’s prospects are worse than others.
The Government is telling the world that it is fighting night and day to save Christmas, in September. Don’t you find that the fight to save Christmas starts earlier every year? I know I do. But what message does that send? Things are so bad, putting a turkey on the table in three months time, is now top of the government’s agenda.
All this and Brexit proper has yet to start. Rows over fishing and Northern Ireland could make things far worse for the UK. Border checks will have to be introduced at some point, lower inward investment, miles of red tape, billions in new bureaucracy. It all adds up.
And as all the world can see, a political party that refuses to see what is happening because its ideology blinds it to simple everyday facts.
Would you bet on this government not just saving Christmas but the UK’s future as well? Because that is what foreign investors bet on.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
If it's any consolation sitting here in New Zealand we are living in a Potemkin village pretending Covid can't reach us and watching our economy crumble. We're borrowing a billion a week to prop up an economy which was very dependent on tourism and has been shut down for more than 18 months now.