Should we despair that the pound has slumped again today, falling below $1.14 for the first time since 1985? Or should we rejoice? It was, after all, a collapse in the pound following Black Wednesday in 1992 – along with dramatically lowered interest rates — which precipitated a lasting economic recovery. It is all too easy to see the value of the pound as a national virility symbol, and think that the stronger it is, the better. In reality, a weak pound – or let’s say a pound set at a realistic level, which properly reflects the costs of wages, goods and services in Britain – can help stimulate the economy by making our exports relatively cheap.
It is all too easy to see the value of the pound as a national virility symbol, and think that the stronger it is, the better
Trouble is that in order to benefit from a weak pound you need export industries which are poised to seize advantage.
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