Why is the pound in a state of collapse ?

[Drewth]

Did anyone see the Bloomberg on the Money TV item: 'The Death of the Pound ?'

One currency analyist forcesast Pound/Euro parity within three months and then the Euro costing £1.10 mid 2009.

There was a clown on there from UKIP who as we all know are a Little Englander right wing party who said he expected the Euro to collapse.

Having watched, I think it more likely that the pound will collapse rather than the Euro. As the analyst said, no one wants the Pound anymore, it is too insignificant a currency kept afloat by exchange merchants wringing their last out of it from ignorant tourists.

Today's bank rates (obtainable to us all at spot on interbank rate via Nationwide etc):

£1 = 1.23 Euros
I Euro = 81.3 pence

[6mauledrv]

The pound has lost v. the euro again today. Currently 1.244 or 80.4 pence.

I am completely baffled by this.

Yes, the UK is in recession and with falling interest rates a poor place for foreign investors but equally, the Euro Zone has been declared in recession and its interest rates are lower than the UK's.

The pound has now lost coming on for 20% of its value in a year and those resident in Spain on sterling incomes must be feeling the pinch.

Any budding economists out there any explanations for the near collapse of sterling. Research indicates commentators talking of Pound/Euro parity in 12 to 18 months but obviously not even experts can see into the future. If that did occur though, I believe it would leave British ex pats impoverished.

Recent falls are twofold.
The world has no faith in the british economy.
The BOE is about to cut interest rates and so the pound is not such an attractive currency to hold as you're going to get a worse return.

[Chrisdee]

I read the papers on-line, not as good as reading a proper newspapers whilst eating your breakfast out on the veranda in the sun, but better than paying those stupid prices and getting dirty fingers.

Don't blame you for not buying them. Outrageous price particularly when you convert that cost into sterling !

[Drewth]

More than likely it's the Bank of England selling pounds to make British goods cheaper to export. They used to publish figures of when this happened but I can't remember seeing any for ages, probably because I won't buy papers at €2.20 plus.

Don't blame you for not buying them. Outrageous price particularly when you convert that cost into sterling !

[simmy]

More than likely it's the Bank of England selling pounds to make British goods cheaper to export. They used to publish figures of when this happened but I can't remember seeing any for ages, probably because I won't buy papers at €2.20 plus.

[Drewth]

It's all a conspiracy!!
The EU want's the UK to convert to the Euro. The UK wont do that whilst the pound is stronger than the Euro. Therefore the pound is loosing strength ready for the UK to convert to the Euro!

I never believed in conspiracy theories. I don't think there is that much order in the world really.

Today the interbank rate has grown even worse:

One Pound = 1.235 Euro
One Euro = 81 pence

Still can't figure out why the Pound is spiralling downwards.

[Julskin]

It's all a conspiracy!!
The EU want's the UK to convert to the Euro. The UK wont do that whilst the pound is stronger than the Euro. Therefore the pound is loosing strength ready for the UK to convert to the Euro!

[Drewth]

The pound has lost v. the euro again today. Currently 1.244 or 80.4 pence.

I am completely baffled by this.

Yes, the UK is in recession and with falling interest rates a poor place for foreign investors but equally, the Euro Zone has been declared in recession and its interest rates are lower than the UK's.

The pound has now lost coming on for 20% of its value in a year and those resident in Spain on sterling incomes must be feeling the pinch.

Any budding economists out there any explanations for the near collapse of sterling. Research indicates commentators talking of Pound/Euro parity in 12 to 18 months but obviously not even experts can see into the future. If that did occur though, I believe it would leave British ex pats impoverished.