The pound is on the brink

[mint]

Cathy, it's 1.1274 today!  Quick, pass the smelling salts.............but, can it last?

[bubbles]

That is just so typical - we are off to UK tomorrow!

[just john]

We really don't need this, -  Pound is on the brink of sinking below parity 

''Any signs of Labour closing the gap ahead of the election would result in the pound plunging,'' -  according to the Centre for Economics and Business Research

[JMB]

This is inevitable. The main reason is that I need to replace the soft top and put a stainless exhaust on my Merc also some amg wheels. So until I do this the pound will continue to decline so making having it all done in the good old uk so much cheaper. So there is a bright side to this.Look on the positive side.[:D]

[Bugsy]

[quote user="JMB"]This is inevitable. The main reason is that I need to replace the soft top and put a stainless exhaust on my Merc also some amg wheels. So until I do this the pound will continue to decline so making having it all done in the good old uk so much cheaper. So there is a bright side to this.Look on the positive side.[:D][/quote]

Well 'bully for you JMB.

There is clearly no space in your thought-process for the many brits living in France whose only income is UK pension-based and falling virtually every month due to the complete incompetance of the current government.

Anyone got a puncture repair kit for my old pushbike ?[:(]

.

[just john]

[quote user="JMB"]This is inevitable. The main reason is that I need to replace the soft top and put a stainless exhaust on my Merc also some amg wheels. So until I do this the pound will continue to decline so making having it all done in the good old uk so much cheaper. So there is a bright side to this.Look on the positive side.[:D][/quote]

Don't tell me JMB your partner is called Marie Antoinette[:)]; - and I used to think people who slashed hoods, keyed the paint and nicked the wheels off AMG's were mindless vandals [6]

just kidding, 'onest[8-|]

[Kitty]

[quote user="just john "]

We really don't need this, -  Pound is on the brink of sinking below parity 

''Any signs of Labour closing the gap ahead of the election would result in the pound plunging,'' -  according to the Centre for Economics and Business Research

[/quote]

Oh no.  How depressing.  Lame duck governments do not work.

[Martin963]

I think "lame duck" is being a bit kind.  

They've got a thumping majority,  they've had twelve years to do the things they want,  and just look at our current state.......

What did Mr Brown say not so long ago about weak government producing a weak currency?  (or was it strong government producing a strong currency?).

I seem to recall he even ventured the idea that under his stewardship there was to be "no more boom and bust".

Oh,  and what happened to that gold he sold at the bottom of the market?

Oh,  and what about the raid on the pension funds,  leaving them fatally weakened?

I became fifty years old last summer,   and in all that time I have never felt more depressed at our national outlook,   and yesterday someone on "Today" confirmed my worst fear (mentioned by me a page or two back in this thread) that capital controls for Britain were a real possibility.

And what are my fellow countryman doing right now?   Shopping!!   Shopping until they drop.   In record numbers.

I can remember when economists went to great lengths to stress that a "consumer boom" was disastrous for a country which needed to export like we do.    And now -  according to Brown's template - a consumer boom is needed just to keep us afloat.

Oh  Joy!

[mint]

[quote user="Bugbear"]

Anyone got a puncture repair kit for my old pushbike ?[:(]




.
[/quote]

Bugsy, has it really come to this?  Well, I don't have a puncture repair kit as I wouldn't know how to use one if I had.  However, I do have a half-decent mountain bike that you could have; except it's only a 14 inch frame as I am quite tiny.

My 4-wheels is now driveable (after months of dithering over whether to change it or keep on buying more and more spare parts as it became apparent that the damage was much worse than at first thought) and it now only needs a trip to the carroiserie (spelling?) for a spray job to straighten the bonnet and weatherproof the new bumper.....ggggrrrrggghhhh!

Tales of woe, indeed, Bugsy in these uncertain times but I hope you and Mrs Bugs had a good Christmas en famille?

[brianagain]

Although it may not seem like it, looking at today's exchange rate it's interesting to note that the pound is actually about 8.5% higher against the euro than it was at the end of last year.

Brian(again)

[mint]

Oh, oh, 8.5% higher impôts then, Brian?[;-)]

[mint]

1.1260 today but can it be true?  Are they saying this just so's that we have to pay more impôts next year?  That is for all those who recommend taking the rate as at 31 December as the one for calculating income tax purposes![:-))]

[just john]

Don't panic but

http://www.guardian.co.uk/business/blog/2010/apr/28/greece-financial-crisis

City veteran David Buik of BGC Partners has also opined:

A very good friend of mine reminded me very succinctly and cogently that the Euro only works if all countries give up financial sovereignty and pool resources for common taxes, budgets and social security. If these boxes are not all ticked, the whole philosophy and ethos of a united Europe crumbles in to dust. It is called make up your mind. Greece will need help for at least 2 more years plus an increased amount of funding. If Greece defaults gargantuan losses could be incurred. Greece is the catalyst, Portugal has been downgraded and who follows – Spain and Italy? Though not in the EU, the UK, with its stubborn refusal to deal with its mountain of debt, looks very vulnerable.

 

[powerdesal]

[quote user="just john "]

Don't panic but

http://www.guardian.co.uk/business/blog/2010/apr/28/greece-financial-crisis

City veteran David Buik of BGC Partners has also opined:

A very good friend of mine reminded me very succinctly and cogently that the Euro only works if all countries give up financial sovereignty and pool resources for common taxes, budgets and social security. If these boxes are not all ticked, the whole philosophy and ethos of a united Europe crumbles in to dust. It is called make up your mind. Greece will need help for at least 2 more years plus an increased amount of funding. If Greece defaults gargantuan losses could be incurred. Greece is the catalyst, Portugal has been downgraded and who follows – Spain and Italy? Though not in the EU, the UK, with its stubborn refusal to deal with its mountain of debt, looks very vulnerable.

 

[/quote]

Odd that !   I really was under the impression that the UK was actually in the EU.

Perhaps David Buik knows something that I don't.

[just john]

[quote user="powerdesal"] Odd that !   I really was under the impression that the UK was actually in the EU.

Perhaps David Buik knows something that I don't. [/quote]

Probably meant the EURO[Www]?

[AnOther]

Can't be that serious, they have scheduled their emergency meeting for May 10th, I'd have thought today or tomorrow might have been more appropriate.

[Devon]

It would be just my luck for the euro to crash just I have nearly finished building my house using £s exchanged at 1.15 -ish [:(]

[velcorin]

Merkel has a big state election next week. She can't appear to give anything to the rest of La-La-Land until after that. Hence the date of the Meeting. And Greece will just have to hang in there.

NB this is mainly a Refinance issue, something the BofE doesn't have to deal with.

[Quillan]

[quote user="velcorin"]Merkel has a big state election next week. She can't appear to give anything to the rest of La-La-Land until after that. Hence the date of the Meeting. And Greece will just have to hang in there. NB this is mainly a Refinance issue, something the BofE doesn't have to deal with.[/quote]

Is not the UK part of the IMF? They said on C4 News that whilst the IMF are only putting in around 1/4 of the money some of it will still come from the UK which is in effect the BofE.

[Jako]

Don't worry. As soon as Greece is out of the picture markets will start to play with the next vulnerable country: The UK.

With no aid package coming from Euro land, the UK will need help from the IMF and the money flows back.[:)]

[Sprogster]

Jako, not so, as UK sovereign debt is structured much more long term than most other countries, unlike Greece, Spain, Portugal, Italy, France and Ireland whose sovereign debt tends to be short term.

At the momernt the Uk has to pay only about 1.2% on its soverieign debt compared to 15% in Greece and double figures in Spain and Portugal.

The UK has a fantastic reputation for always meeting its financial obligations, and without being complacent there is no sign whatsoever of international investors shying away from the UK.

The UK was able to effectively devalue the £, Greece, Spain, Portugal, Italy and Ireland have saddled themselves with too strong a currency and that is where the main problem ls.

[Quillan]

And there's not much sign of of international investors shying away from the Euro either. It has gained some ground against its recent drop against other currencies today especially after the German announcement of a decrease in unemployment by 68,000. There are a lot of interesting articles on Forex which all show that the Euro is relatively stable and that the situation in Greece is only seen as a minor blip.

[Richard51]

[quote user="Sprogster"]

The UK has a fantastic reputation for always meeting its financial obligations, and without being complacent there is no sign whatsoever of international investors shying away from the UK. [/quote]

Exactly - inward investment into the UK has actually increased significantly over the last few months.

Q - If Greece is just a Euro blip then there are a few more coming along behind...Portugal, Spain etc

[Sprogster]

In all likelihood the Euro will continue to decline from around 1.33 against the US$ to about 1.11 early next year. However, this is a good thing and will be welcomed by most Eurozone countries, as helping exports and thereby hopefully the situation with the weaker Eurozone members.

As for the £ against the Euro, if matters settle down post election, then by early next year we should be back to around 1.22 to 1.25, compared to the current spot rate of 1.15/1.16.

[Jako]

[quote user="Sprogster"]

The UK has a fantastic reputation for always meeting its financial obligations, and without being complacent there is no sign whatsoever of international investors shying away from the UK.

The UK was able to effectively devalue the £, Greece, Spain, Portugal, Italy and Ireland have saddled themselves with too strong a currency and that is where the main problem ls.[/quote]

There are only two countries that have never defaulted: The Netherlands and the USA. The UK has no such reputation.

The UK is already defaulting by devaluing its currency by 25% ( = 25% haircut for foreign debt holders) ,paying debt by simply printing money to the extend of 13% of gdp and promote inflation in order to inflate the debt away.

The real unemployment is 23 % ( non-active), the real public debt is 180% of gdp ( including the bank bailouts) and private sector debt is 200% of gdp.

This way of defaulting is easy for the UK, but markets are not stupid, there is no easy way out.