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Is the devaluation of the pound a good thing? Watch

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    As an economics a-level student I firmly believe that we need to export more and import less. As the pound gets weaker, businesses are forced to look for UK suppliers meaning that those businesses would benefit so theoretically, employment would go up since more jobs would be available. Because of that, inflation would go up(in which we desperately need) and the £71bn budget deficit in 2014 will go down meaning that we'd have a similar budget deficit to the one we had when Margret Tatcher was prime minister.

    However, if the pound keeps declining then it will be a bad thing in the long run but I genuinely believe that look at the devaluation of the pound as a possible thing, we need our economy to use home grown businesses rather than businesses from abroad.

    Thoughts?
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    As a short answer, I agree. Depreciation of the £ is bad.
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    (Original post by SubZero~)
    As a short answer, I agree. Depreciation of the £ is bad.
    It depends on how you look at it, I guess. In the short-ish run(2-5 years) it would be good but if it keeps declining and never recovers in a few years after 5 years or so it would be awful for us, mainly depends on the elasticity of the goods being imported I gues
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    (Original post by BrianMcEgg)
    As an economics a-level student I firmly believe that we need to export more and import less. As the pound gets weaker, businesses are forced to look for UK suppliers meaning that those businesses would benefit so theoretically, employment would go up since more jobs would be available. Because of that, inflation would go up(in which we desperately need) and the £71bn budget deficit in 2014 will go down meaning that we'd have a similar budget deficit to the one we had when Margret Tatcher was prime minister.

    However, if the pound keeps declining then it will be a bad thing in the long run but I genuinely believe that look at the devaluation of the pound as a possible thing, we need our economy to use home grown businesses rather than businesses from abroad.

    Thoughts?
    It may deter foreign investment and internal investments, especially for things like bonds, because your weakening the value of such products. And please devalue after I've travelled haha exchange rate may suffer, insecurity in the markets as well.
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    (Original post by honestly)
    It may deter foreign investment and internal investments, especially for things like bonds, because your weakening the value of such products. And please devalue after I've travelled haha exchange rate may suffer, insecurity in the markets as well.
    But wouldn't more foreign companies be able to buy land more cheaply so they can offer more jobs because of their expansion? Although pricing for their goods will be cheaper, If we get the consumer confidence of pre-2009 recession then people wouldn't care too much about the pricing. The only way I can see consumer confidence going up is if inflation is higher(caused by higher employment and shorter supply of goods) so the wealth effect occurs as wages would be higher because of inflation. Therefore, less people will care about pricing and more will care about the quality of their goods.
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    It tends to depend on speed of change, gradual where the system absorbs the impacts is usually okay, sharp movements tend to lead to uncertainty and business stagnates (sits on its hands to see what happens next)

    Countries tend to deal with changes eventually, where such changes are really dangerous is that when you have one after another and the end is not in sight.

    Currently with Brexit as a possibility and maybe/maybe not another referendum in Scotland ,depending on its outcome (presuming you are looking at currency fluctuation as a possible effect of Brexit, or even the fear of Brexit,) certainly the Scottish economy needs all this like a hole in the head.

    As someone who leases commercial premises to other business entities the lack of activity (tenants are not moving to bigger units/few enquiries to lease units) says it all, there is currently no dynamic and until such issues resolve maybe there will be no dynamic.

    The killer is not change it is not knowing what the change will be.
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    its bad
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    Devaluation of a currency is always an interesting point to mill over.

    On the one hand it makes everything we export cheaper and in encourages us to produce more of the goods we consume.

    However we do import a lot of stuff and until much more manufacturing of those goods are made here the public suffers.

    For me it depends on your long term aims and if your willing to go through the pain to get it.


    Having said all of that I'm a big believer that all the current economic models will be bust in 30 years due to automation leading to mass unemployment and therefore extreme tax rates and probably public ownership of all sorts of private companies now.

    Never in history have we had a time where the rich didn't need the average people to create their wealth through their labour of one kind or another and that day for me is coming in the future decades.


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