Why is the pound in a state of collapse ?

[John50]

At this time the pound is buying around 1.118 euros although it does seem to be extremely variable. That makes the euro worth 89.4 pence.

A while back I was dismissed for saying the fall of sterling would have serious consequences for tourism here. In the local rag today, there is coverage of Spanish press reports that bookings for Christmas and the New Year are down 30% this year although Benidorm has reduced that to a 20% drop by offering cut price trips for Spanish pensioners.

[Warrior]

Well ta very much America - having destroyed the economy of the whole world they now won´t agree a bailout for the Auto Industry, that means the western worlds car industry in Europe & UK will also go down the pan. How many more jobs can we afford to lose before they start another world war to get rid of the dole queues.

[meldrew]

I believe mr brown wants to be the prime minister to give us the euro and ditch the pound ,just look at tesco they are already priceing up in euro & pounds.on all their labels.

[yllig]

There wont be any Christmas in our house!!

We have even re-used the Christmas cards to send to each other that we sent last year and forget buying presents.

We are sending e-cards to relatives and friends by email to save the stamps!!!

[John50]

In this united europe, the Germans and Brits are now arguing over the best way to sort this mess out. Great, even more people are dumping the 'PP' (pathetic pound) now which has fallen to 1.12 ! Happy bloody Christmas !

[Warrior]

Surely Gordo does not want to go down in history as being the Prime Minister at the time when the £ totally collapsed??

Apparently the Times were saying at the weekend they predict that sterling will go back up to 1.25 end of 2009/beginning of 2010.

Lets hope that is the case.

Smiler will go down in history as the prat nobody voted for who destroyed the pound, and probably took us into the Euro at level rates.
The end of 2009 is 12 months away and they say a weeks a long time in politics so what can happen in a year?

[yllig]

Surely Gordo does not want to go down in history as being the Prime Minister at the time when the £ totally collapsed??

Apparently the Times were saying at the weekend they predict that sterling will go back up to 1.25 end of 2009/beginning of 2010.

Lets hope that is the case.

[John50]

Well it's tumbling fast now:

a Pound is 1.137 euros and a euro 87.9 pence

Frightening and very worrying.

[yllig]

I saw the BBC Website and that article.

This afternoon Alistair Darling got a grilling from the Treasury Select Committe (from the opposition members anyway). He was asked that with the decline in the value of sterling at what point would government intervene, and what action would it take.

He replied that there had been a great deal of volatility in currency markets generally and his job was to ensure that the economy recovered as quickly as possible. The committee member said 'so you don't intend to take any action to support the pound?' There was an embarrassing pause, some shuffling on his seat and he then simply repeated his earlier response!

So not help from that quarter!!!

[John50]

Well, it's made the BBC at long last

BBC NEWS | Business | Sterling hits new record euro low

[yllig]

I absolutely agree with that comment that the worry is outweighing the benefits.

It is the only thing I can think about at the moment!!

[John50]

I just read this on the other site:

"I own a property in Villamartin which i have been trying to sell for over 2 years now.

12 months ago i signed up with a local rental company to attract rentals to the house and also with the hope that they may be able to sell the house as well

4 months ago they found us a long let for 9 months which in the current financial climate was great news, however this is when the problems started. Everything seemed to go wrong in ths house, repairs we required constantly, the TV broke, the oven etc etc and as the months went on our monthly rental of 600 euros was reduced to very little!

being based in the UK i have no control over this and had to assume that the company were correct in their findings. recent conversations i have had with them i have advised them that i am not happy with their service and will consider not renewing my contract with them on 1st December 2008, and guess what................the tenants have suddenly disappeared!! amazing

anyhow, i need some advice on the following please

the mortgage currently is far more than i can afford to pay, and in the current climate i dont envisage any hope of selling the property in the near future, even if i give it away, which is what i have been trying. so therefore, what are my options?

what is the outcome if i can not afford the mortgage? is it the same principle as in the UK regarding repossessions? will it effect my credit scoring in UK?

if possible i do not want to go down this route but currently the outgoings far away the incomings

any help would be greatly appreciated"


The sad thing is that I know this person is not alone. I thought I was reasonably comfortably off but having just seen my pension income I am seriously worried, more so than in several years. Many people around me have actually gone back to the UK now and stay with relatives there finding it cheaper - heating, food bills etc. When I read things like above I wonder quite where this will all end ? In the words of the song....'Regrets, I have a few' even more so now. I used to enjoy it here but the worry is exceeding the benefits increasingly.

The pound is currently at 1.145 euros.

[6mauledrv]

Two points:

First - the euro will do better than sterling. Europe simply has not accumulated the level of public debt that the UK has. There are doubts now that the UK gov. will be able to repay the money they've borrowed; this will further degrade the pound if no one wants to buy gov. bonds.
We still haven't dealt with the accumulating private credit card debt. Have you heard that folk are using their credit cards to make mortgage payments? You don't have to be too smart to figure out where that is going to lead. The s**t will hit the fan very soon.

Second - the main difference ( and the largest in money terms) between living costs here and the UK is the cost of owning and running a home.

[yllig]

I dont agree Warrior. We might have had £1400 council tax a year there but we have 1500 euros private medical here so no saving there.

We paid a lot less for our internet, less for our car insurance, our electricity and gas - 3 bed central heating was £60 per month. We pay on average 129 euros a month here and certainly no central heating. In fact, hardly any heating!!

Our water was metered in the UK - metered here. About £40.00 an year more in the UK.

OK fuel is a bit less here, tv licence doesnt exist, car tax is less, booze is a bit cheaper but we dont drink loads so that is not the be all and end all.

We used to pay around £60.00 a week on food in the UK. Here we are spending around 85 euros which will soon become equal to £85.00.

Our buildings and contents insurance here is more than the UK for a smaller house!!!

Dont know what you mean about fines and penalties. Never paid any.

All in all is it worth it for the weather alone?? We think so at present but if we cannot afford to go out or travel around Spain, we would be better off back in the UK working and at least be able to afford to have a meal and the odd holiday.

No chance of a holiday here. In fact a chinese menu of the day would be nice at the moment.

Unfortunately like a lot of others we bought at the peak of property prices and came over thinking we were going to get 1.40 ish maybe more for our £. My god what a cock up!!

[Warrior]

I wonder if it will ever go back up again though?

We can live with not going out and watching every penny if things improve after a year or 18 months but if it was permanent then I think a lot of people may have to go back to the UK as I think it will be cheaper to live there than here with that sort of exchange rate. We would certainly think about it in a few years. We dont get the first of our pensions for another 6.5 years but even then I think it wont be easy.

If you can´t make ends meet here in Spain you certainly can´t afford to live in the UK, think of all the outrageous taxes & rates & fines for late payments.
Until the rate drops to GBP 2 = € 1 then you´re better off staying put.