Why is the pound in a state of collapse ?

[John50]

the markets are still open. If you go here, you can see the changes in real time:-

Marketwatch | Foreign Exchange Rates | HiFX plc

Brian

Just 'popped' in. Thanks for this Brian - interesting website. I see that despite Christmas, the relentless fall has still gone on. 1.041 right now.
Judging by HIFX's briefing, the 8th January could be an interesting day:

W/C 22nd December 2008 : Market briefing : HiFX plc: Marketwatch

Enjoy your New Year festivities.

[Warrior]

Went to Iceland in Torre today. There certainly doesnt seem to be any shortgage of money there. Absolutely chocka and another branch opening in La Marina in Jan 09.

Yes it was but only because the muppets don´t seem to realise that Iceland is still using a €1.5 to 1GBP exchange rate - all their party packs that are advertised on TV @ 5GBP are €7.50 over here.
I personally wouldn´t be seen dead in the place.

[Chrisdee]

I spoke to the manager the other day and asked about their prices. Apparently all the goods are coming down but he said they couldn't do it all overnight. He said it would be approximately 1.35 to the pound. When I asked why my chicken kievs were marked up for 1 pound but cost 1.50 euros, he said, "Ah, you've picked 2 of the products we haven't reduced yet"
I wouldn't normally be seen dead in Iceland in the UK either, it's always looked like a slobby shop but I do get the occasional thing I want in there here. Yes I live in Spain but I still like my crumpets, Marmite and a nice bit of Cadburys chocolate.

[6mauledrv]

We're at 1.029 this morning - not at the bottom yet.
Mind you, they will soon need to do something about the euro - it's becoming overvalued and will hinder european exports.
Iceland - would it be an idea to contact the freebie press and get them to monitor their prices and do a regular report? Would they play ball or are Iceland's adverts of more importance?
Ditto for Dell Boy, Johstons, etc.

[John50]

At 1.027 it's still dropping as you say. I must admit to being very worried indeed. No option but to try to 'weather' it out as no property in the UK any more but who of us could ever have expected this ?

I do note the official 'breadline' in Spain is around 620 to 630 euro per month. So in theory, it must be possible to survive on that but many of us are falling frighteningly close now. I really don't know what the answer is.

BBC NEWS | Business | Pound hits new low against euro

Pound falls to new record low against euro - The Irish Times - Mon, Dec 29, 2008

Re. Iceland Stores - are they actually Iceland I wonder as I have seen them referred to as something else 'Overseas Holdings Ltd' or similar. I also see that they are hoping to open two other stores. The prices they charge are outrageous and will surely be reflected in a drop off in sales after the New Year festivities.

[6mauledrv]

Re. Iceland Stores - are they actually Iceland I wonder as I have seen them referred to as something else 'Overseas Holdings Ltd' or similar. I also see that they are hoping to open two other stores. The prices they charge are outrageous and will surely be reflected in a drop off in sales after the New Year festivities.

Yes, I suppose they'll get the message when sales drop off, which I sincerely hope they will.

Elsewhere in this forum, someone queried the manager who said that prices will be adjusted to 1.35 euros/pound. That's only 10%, where the pound has dropped 30%. Allowing for transport etc. (substantial savings in fuel), you should be dropping prices by 20%.

Come off it Iceland - don't do as the UK gov. Don't treat us like idiots!

[John50]

I take a little comfort from this and trust that interest rates will be left on hold by the BofE:

Interest Rate: Fear For Falling Pound Persuades Bank Of England To Limit Reduction | Business | Sky News

[yllig]

Interesting article. Unfortunately all the newspapers and news channels forecasting a further drop down to maybe 0% has not stopped the £ sliding. We seem to be the only country that talks itself down. Maybe its best to limit some of the bad news a little. It's only done to sell papers not to keep people informed.

Maybe if its only £ to Euro for a few months people can manage to last out as long as it goes back up to maybe 1.20 ish. (I am trying to hold that thought).

A friend of ours a foreign currency money broker (now retired) has said that it should not really go much lower and as soon as big institutions require more sterling from the money market which they undoubtedly will it will go back up.

We will see how true that is.

[John50]

On this last day of 2008, a tumultuous year for many of us, currently the pound buys 1.034 Euro.

[rspltd]

Euro/pound

I think there will be a change when the Eurozone finally comes clean about their finances.
"'While the outlook for the UK economy is pretty terrible, we're at a stage where that's already in the price,' said Ian Stannard, a senior currency strategist in London at BNP Paribas."

'The big shock next year is going to come from the eurozone as the economy contracts much more than currently expected. The ECB will have to wake up and start cutting rates. That's going to really damage the euro."

[bob@goodman9741.fsnet.co.]

yes and dnn`t forget many will opt for hols outside the euro zone making the euro and dare isay it euro property worthless ,great happy new year
Bob

[Armin Tamzarian]

yes and dnn`t forget many will opt for hols outside the euro zone making the euro and dare isay it euro property worthless ,great happy new year
Bob

Just in time Bob. With less than 10 hours left until the end of 2008 you win the prize for the dumbest statement of the year.

[bob@goodman9741.fsnet.co.]

sorry. just crying in my beer,
Bob.

[6mauledrv]

Don't despair yet.
Pound's up to nearly 1.05.
Could this be a change of direction?
It would be a great new year present!

[John50]

A very happy, peaceful and hopefully less economically stressful 2009 to one and all. (myself included) !