The pound is on the brink

[Jazzer]

According to the Express supporting front page this morning The IK recession is over-according to experts at Glodmann Sachs.

[Quillan]

Here go these blinking experts again. Yesterday on the BBC some guy from some company (I didn't take notice of the name) said it would take a few more years. The question is do any of these so called 'experts' really know whats going on, judging by the variance in what they have to say I doubt it. Anyway I think many of them, coupled with their greed, got the UK in to the mess its curently in.

[Jako]

"When a government is printing money to pay its debts that is in effect a default."

So, by definition, the UK is now technically bankrupt.

[baypond]

Not really, by definition the UK would have to have missed interest or capital repayments on borrowings to be in default. So no we are not in default by definition or technically. We may be in the merde, but at no point can you say we are bankrupt by your argument.

[woody234]

can anyone tell me how to stop getting autamated emails from this thread, my inbox cannot cope anymore, please help

[Clair]

[quote user="woody234"]can anyone tell me how to stop getting autamated emails from this thread, my inbox cannot cope anymore, please help[/quote]

http://www.completefrance.com/cs/forums/1758955/ShowPost.aspx

[woody234]

clair thankyou

[mint]

So, here's why the pound fell against the euro today.........

http://business.timesonline.co.uk/tol/business/economics/article6803098.ece

edit: aaaaaaaaarrrrrrrrrrrgggggggggggghhhhhhhh.  Sorry, link doesn't work![:(]

[Jako]

There were a few other reasons as well:

-King stating that the UK cannot afford a strong currency

-King's wish to print even more extra money

-Cameron stating that the UK might forfeit on its loans

[NormanH]

This news won't help either

[Kitty]

So the weak British government just limps on and we all suffer.

[velcorin]

Or you could take this view point http://uk.reuters.com/article/idUKLNE57J02Y20090820

[Jazzer]

This will be the same Mervyn King who in his August Inflation report 2 years ago, and amidst many people warning of the dangers of the build up of credit stating that"securitisation had made the banking system safer and more resiiant since it took financial risk off the Bank's balance sheets.He/The Bank saw no possibility of a recession in 2009!

[mint]

Can someone please explain how these guys get to keep their jobs?

[gosub]

NO

[mint]

I thought not too, Les.[:'(]

[Jay]

Recession in Britain 'at an end'

So why has the exchange rate dropped to 1.147?

[Frederick]

1.10 when I went to the post office this afternoon for tourists

[Sprogster]

What is under pinning the euro to a large extent is the carry trade, whereby currency traders borrow in sterling which has a lower base rate of 0.5%, convert the funds to euros and place them on overnight at a higher interest rate, as the ECB base rate is 1%.

Not a great return for the man on the street, but when you are trading muilti millions a nice little earner.

Historically, the UK has had a higher base rate than the the eurozone and at some point in the future, that position is likely to resume, as the BofE is likely to have to raise interest faster to choke off inflation.

However, this is not likely to happen anytime soon.

[JMB]

[quote user="Cathy"]So the weak British government just limps on and we all suffer.[/quote]

There is no doubt that the weakness of sterling is causing a bit of a problem for people whose income is in sterling. But spare a thought for those of us who earn in euros. We had it really bad for a couple of years but now we are able to snap up bargains in the poor old  uk. So lets all hope for at least a 1 to 1 exchange or dare I say a 75ct pound.[:D]

[tom.daniel]

[quote user="Sprogster"]What is under pinning the euro to a large extent is the carry trade, whereby currency traders borrow in sterling which has a lower base rate of 0.5%, convert the funds to euros and place them on overnight at a higher interest rate, as the ECB base rate is 1%. Not a great return for the man on the street, but when you are trading muilti millions a nice little earner. Historically, the UK has had a higher base rate than the the eurozone and at some point in the future, that position is likely to resume, as the BofE is likely to have to raise interest faster to choke off inflation. However, this is not likely to happen anytime soon.[/quote] The carry trade doesn't really effect GBPEUR, it is mostly YEn to AUD/NZD. The move yesterday was due to stronger figures from the eurozone and more worries about the UK economy compared to thse of France and Germany

[Quillan]

[quote user="Jay"]

Recession in Britain 'at an end'

So why has the exchange rate dropped to 1.147?

[/quote]

Thats a bit misleading and not actual. What the first sentence said was "Confidence among business professionals has surged, suggesting the recession is at an end, a survey has said." The article says it talked to over 1000 Chartered Accountants in England, Scotland and Wales, that's about 1% so its not a true representation of them all.

It does not say that the recession is actually at an end which is why the rate did not improve. You will know when it does because the exchange rate will hit around 1.20 Euros to the pound.

 

[Benjamin]

The U K's contribution to the EU budget is set to rise by 60% so that won't help either.

http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=354931&re=6609&ea=161021

[Benjamin]

Or maybe it's still worries over the total Quantative Easing?

http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=354967&re=6617&ea=161021

[JMB]

Ee bah gum the pound is at 1.1384€ this morning. Will it dip below 1.10€ this week? Will Gordy and Mandy with their Darling be able to save Brittannia?[:D]