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Do you think the UK should have a stronger pound?
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Considering that the vast majority of Tory supporters are people with large amounts of assets and savings (e.g. pensions) I am surprised that they have let the pound fall so lowly.
I think a strong pound is good for the economy since the UK barely manufactures anything. We're not Germany or China in that keeping a weak poind would help the economy grow.
I think the Tories should do more to support a stronger pound, even if that hurts the exporting market, simply because the UK isn't really an exporter of goods and the losses can be absorbed.
I think a strong pound is good for the economy since the UK barely manufactures anything. We're not Germany or China in that keeping a weak poind would help the economy grow.
I think the Tories should do more to support a stronger pound, even if that hurts the exporting market, simply because the UK isn't really an exporter of goods and the losses can be absorbed.
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#2
We used to have a very strong pound in 2010
I remember the exchange rate GBP to USD was like 1.81 or something crazy
I remember the exchange rate GBP to USD was like 1.81 or something crazy
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#3
1) The Tories do not control the value of the pound
2) Mark Carney has been a disaster and has lost all credibility in the eyes of global investors, no one trusts a word he says and he seems to have a pathological phobia against raising interest rates.
Carney didnt even raise interest rates when inflation was above 3% back in 2010ish, he is a disaster
2) Mark Carney has been a disaster and has lost all credibility in the eyes of global investors, no one trusts a word he says and he seems to have a pathological phobia against raising interest rates.
Carney didnt even raise interest rates when inflation was above 3% back in 2010ish, he is a disaster
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(Original post by ayyy2)
We used to have a very strong pound in 2010
I remember the exchange rate GBP to USD was like 1.81 or something crazy
We used to have a very strong pound in 2010
I remember the exchange rate GBP to USD was like 1.81 or something crazy
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(Original post by hannah00)
1) The Tories do not control the value of the pound
2) Mark Carney has been a disaster and has lost all credibility in the eyes of global investors, no one trusts a word he says and he seems to have a pathological phobia against raising interest rates.
Carney didnt even raise interest rates when inflation was above 3% back in 2010ish, he is a disaster
1) The Tories do not control the value of the pound
2) Mark Carney has been a disaster and has lost all credibility in the eyes of global investors, no one trusts a word he says and he seems to have a pathological phobia against raising interest rates.
Carney didnt even raise interest rates when inflation was above 3% back in 2010ish, he is a disaster
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#6
(Original post by whatsprogressive)
That's a bit far fetched. The Tories can theoretically control the value of the pound by instigating the Bank to do certain things. It's not as if the Bank is truly independent and then there are many instruments that the UK government could use to influence the strength of the currency (such as QE famously in the Great Recession).
That's a bit far fetched. The Tories can theoretically control the value of the pound by instigating the Bank to do certain things. It's not as if the Bank is truly independent and then there are many instruments that the UK government could use to influence the strength of the currency (such as QE famously in the Great Recession).
Theoretically the Tories could fire Carney, but that is only power they have, and it would probably lead to accusations of abuse of power
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#7
(Original post by hannah00)
1)
2) Mark Carney has been a disaster and has lost all credibility in the eyes of global investors, no one trusts a word he says and he seems to have a pathological phobia against raising interest rates.
1)
2) Mark Carney has been a disaster and has lost all credibility in the eyes of global investors, no one trusts a word he says and he seems to have a pathological phobia against raising interest rates.
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#9
(Original post by ByEeek)
Where as I agree Carney has lost some credibility (in the eyes of some) he has conflicting views to balance. On the one hand, we have rising inflation as the result of a weakened pound and rising fuel prices (both outside our control) and on the other hand we have a weak economy that is highly leveraged, borrowed to the hilt, with weak / falling household income. Raising interest rates helps no one except savers and they are few and far between. It is like trying to land a plane using only the throttles (which incidentally has been done but the plane came to rest in a minefield).
Where as I agree Carney has lost some credibility (in the eyes of some) he has conflicting views to balance. On the one hand, we have rising inflation as the result of a weakened pound and rising fuel prices (both outside our control) and on the other hand we have a weak economy that is highly leveraged, borrowed to the hilt, with weak / falling household income. Raising interest rates helps no one except savers and they are few and far between. It is like trying to land a plane using only the throttles (which incidentally has been done but the plane came to rest in a minefield).
The rise in inflation due to the pound, was entirely due to him cutting interest rates to 0.25. There was no need, he should have waited, instead he almost started a run on the pound.
There are plenty of savers(and would be more with higher rates, savings are essential for economic growth), and very low interest rates causes all sorts of distortions in investment and trouble for companies with large pension scheme deficits. Its basically glorified price fixing, which didnt work in the soviet union and wont work in the UK.
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#10
(Original post by hannah00)
The rise in inflation due to the pound, was entirely due to him cutting interest rates to 0.25. There was no need, he should have waited, instead he almost started a run on the pound.
The rise in inflation due to the pound, was entirely due to him cutting interest rates to 0.25. There was no need, he should have waited, instead he almost started a run on the pound.
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#11
(Original post by ByEeek)
I think you need to wind the clock back to 2008 and remind yourself of just exactly what happened. Then you might understand why interest rates sank so low. Do you not remember the financial crisis where over night, people and banks alike stopped borrowing. We were pretty close to going bankrupt.
I think you need to wind the clock back to 2008 and remind yourself of just exactly what happened. Then you might understand why interest rates sank so low. Do you not remember the financial crisis where over night, people and banks alike stopped borrowing. We were pretty close to going bankrupt.
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#12
(Original post by hannah00)
Carney didnt even raise interest rates when inflation was above 3% back in 2010ish, he is a disaster
Carney didnt even raise interest rates when inflation was above 3% back in 2010ish, he is a disaster
He didn't raise BoE bank rate in 2010 as Governor of the Bank of Canada?
Surprising to you I guess but I'd be mad if the monetrary policy committee and Mervin King had changed policy because Canada said so.
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#13
(Original post by hannah00)
QE was done by the Central Bank not the Treasury.
Theoretically the Tories could fire Carney, but that is only power they have, and it would probably lead to accusations of abuse of power
QE was done by the Central Bank not the Treasury.
Theoretically the Tories could fire Carney, but that is only power they have, and it would probably lead to accusations of abuse of power
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#14
(Original post by Jammy Duel)
It's not 2008 though, that is why the rates dropped to 0.5%, it's not the reason they still are there, Carney has looked for any excuse he can to hold them at 0.5% so that he can sit out the rest of his term without any issues, he gets to look better in a few years too when the next recession comes because it will be the next guy's problem.
It's not 2008 though, that is why the rates dropped to 0.5%, it's not the reason they still are there, Carney has looked for any excuse he can to hold them at 0.5% so that he can sit out the rest of his term without any issues, he gets to look better in a few years too when the next recession comes because it will be the next guy's problem.
We are a country who now rely on borrowing. If you put up interest rates in a weak economy, you send a lot of people over the edge. And for what? So you might have a stronger pound but all the disposable income ends up going on interest repayments and not on buying cheaper imports. The only people who win are the banks.
Why do you think interest rates should be higher?
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(Original post by Quady)
Really?
He didn't raise BoE bank rate in 2010 as Governor of the Bank of Canada?
Surprising to you I guess but I'd be mad if the monetrary policy committee and Mervin King had changed policy because Canada said so.
Really?
He didn't raise BoE bank rate in 2010 as Governor of the Bank of Canada?
Surprising to you I guess but I'd be mad if the monetrary policy committee and Mervin King had changed policy because Canada said so.
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#16
(Original post by ByEeek)
Not at all. For a start, Carney doesn't set interest rates. The monetary committee does. Secondly, why would any committee put up interest rates when the economy is so weak? Do you not remember black Wednesday when interest rates went up to 13%? It nobbled almost all homeowners over night.
We are a country who now rely on borrowing. If you put up interest rates in a weak economy, you send a lot of people over the edge. And for what? So you might have a stronger pound but all the disposable income ends up going on interest repayments and not on buying cheaper imports. The only people who win are the banks.
Why do you think interest rates should be higher?
Not at all. For a start, Carney doesn't set interest rates. The monetary committee does. Secondly, why would any committee put up interest rates when the economy is so weak? Do you not remember black Wednesday when interest rates went up to 13%? It nobbled almost all homeowners over night.
We are a country who now rely on borrowing. If you put up interest rates in a weak economy, you send a lot of people over the edge. And for what? So you might have a stronger pound but all the disposable income ends up going on interest repayments and not on buying cheaper imports. The only people who win are the banks.
Why do you think interest rates should be higher?
You also say that we are a country that relies on borrowing, but that has been true for a long time, household debt levels have been at today's levels for decades, and as for why interest rates should be higher: I'm not Gordon Brown. There will be another recession and it's "due" around about now with no shortage of threats: escalation to a full of trade war with America poses a threat; Italy could end up causing problems; Brexit going wrong could cause serious problems both sides of the channel; China is nowhere near as robust as it used to be and a financial crisis there could easily spread; even without the problems Italy could cause the Eurozone is hardly in good shape with their QE programme still expanding and interest rates at 0% still. Rates need to go up so that when the next recession hits, particularly if it's a global recession, they can be dropped again.
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#17
(Original post by Jammy Duel)
Rates need to go up so that when the next recession hits, particularly if it's a global recession, they can be dropped again.
Rates need to go up so that when the next recession hits, particularly if it's a global recession, they can be dropped again.
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(Original post by ByEeek)
Ahhh - interesting. But might higher rates not push us into that recession? I can't help feeling we are moving into uncharted territory. A world where we are starting to discover that we can not see unlimited exponential growth in our economies e.g. the expectation that growth should be a constant 2% a year forgetting that each year that 2% is worth more than the last year. A world where finite resources upon which our financial models are based break down when those resources become depleted.
Ahhh - interesting. But might higher rates not push us into that recession? I can't help feeling we are moving into uncharted territory. A world where we are starting to discover that we can not see unlimited exponential growth in our economies e.g. the expectation that growth should be a constant 2% a year forgetting that each year that 2% is worth more than the last year. A world where finite resources upon which our financial models are based break down when those resources become depleted.
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#19
A stable pound helps business. Not that many of the 52% understand this, having been fooled by the Brexit campaign.
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#20
(Original post by whatsprogressive)
Everyone is forgetting that we have negative birth rates. In a more racist European climate, ethnic Europeans aren't going to get any worse economically.
Everyone is forgetting that we have negative birth rates. In a more racist European climate, ethnic Europeans aren't going to get any worse economically.
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