Quote:
Originally Posted by OLD BOY
I know! Remainders are talking as if the fall in the value of the pound is a bad thing, whereas it's the best thing that could have happened for our exporters.
The pound was over-valued before anyway, and this is no more than a long awaited correction.
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True, though so far more than balanced by a drop in consumption and investment.
See how it settles in the longer run. So far this has been the most ineffective devaluation in terms of impact on exports since at least the 70s. Most of what we export is, for obvious reasons, not all that price sensitive.
Our export market has changed dramatically. We are world leaders in a few fields, those fields aren't that dependent on costs. Items that are price-sensitive are produced in countries where the cost of said production is far lower than anything a Sterling devaluation could allow us to reach.
Once inflation has run its course it'll be worth watching what happens.
---------- Post added at 22:35 ---------- Previous post was at 22:25 ----------
Quote:
Originally Posted by Chris
As a B&B owner with a high proportion of foreign visitors, I am in effect an exporter of services, and I can tell you that the currency situation is doing no harm at all to those who export more than they import. Exporting is the future and once we're free of the Customs Union and able to make reciprocal deals with the whole world rather than just the EU, those who can export are going to do very nicely indeed, as are those who are able to exploit the relative expense of imported goods by manufacturing domestically at a more competitive price.
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I'm fairly sure the Customs Union doesn't impact on export of services outside of the European Union, the Common External Tariff is on goods, and trade deals that include services are extremely rare and usually come in things like the EU, NAFTA, ASEAN, etc, rather than bilateral deals. These carry a whole bunch of things with them that may prove unpalatable to those concerned about total 'sovereignty' whatever that is.
About 80% of our economy and an even higher proportion of exports are services.
Even free trade agreements on goods aren't trivial. We have FTAs with about 65% of the world economy right now. That's not going to be trivial to replace in a way that doesn't cause some enormous problems for some sectors of our economy. I've read the stuff about unilaterally declaring zero tariffs. It'd be absolutely insane.
You make a valid point about manufacturing finished goods domestically, however we aren't exactly raw material rich as a nation and
factory gate inflation has been a big issue that's undone a fair amount of the benefits of the devaluation.
It's been good for my employer though for sure - even with the pay rise they gave me I'm still 15% cheaper than I was a bit over a year ago
