Collapse of sterling is news?

[Fittster]

Is there technical definition for a run on a currency, in the same way that a market crash is a drop of 10%?

Britain is heading for a “collapse of sterling” if Gordon Brown persists with trying to borrow his way out of trouble, George Osborne says in an interview with The Times today.
“Sterling has devalued rapidly against the euro and the dollar. We are in danger, if the Government is not careful, of having a proper sterling collapse, a run on the pound. The danger of a run on the pound . . . is that it pushes up long-term interest rates, which is a huge burden on the economy. The more you borrow as a government the more you have to sell that debt and the less attractive your currency seems.”
http://www.timesonline.co.uk/tol/news/politics/art...

Now maybe I’m missing something but when I look at a chart of the pound/dollar exchange rate it appears there has already been a kicking for the notes with a picture of an old lady on.

[Gun]

I bet they're trying to introduce the Euro by making Sterling worthless!

[davido140]

Gun said:

I bet they're trying to introduce the Euro by making Sterling worthless!

Precisely my thinking. As soon as its 1:1 we might as well change over.

[Fittster]

Does anyone have a chart they could post showing the GBP/Euro exchange rate over the last 12 months?

[davido140]

Fittster said:

Does anyone have a chart they could post showing the GBP/Euro exchange rate over the last 12 months?

here you go..

[303Hound]

davido140 said:

Fittster said:

Does anyone have a chart they could post showing the GBP/Euro exchange rate over the last 12 months?

here you go..

haha.

like it.

[sleep envy]

sterling tanks following increased public borrowing and reduction in interest rates?

who'da thunk it

[Plotloss]

davido140 said:

Gun said:

I bet they're trying to introduce the Euro by making Sterling worthless!

Precisely my thinking. As soon as its 1:1 we might as well change over.

Never!

If its 1:1 they might as well change over.

[Fittster]

Speaking during a visit to America, Gordon 'Great Brain' Brown said there was "scope" for further cuts to build on the Bank's decision to slash rates by 1.5 per cent earlier this month.

It is unusual for the Prime Minister to comment on monetary policy and his comments will be interpreted as a call for the independent bank to make further reductions. Economists expect rates to be cut by at least 0.5 percentage points next month.

http://www.telegraph.co.uk/finance/economics/inter...

Looks like I'll be taking my Hols in the UK in 2009!

[tank slapper]

I read earlier that Sterling has already dropped in value by much more than the devaluation when Wilson was in office, yet this seems to be largely unreported.

[sleep envy]

tank slapper said:

I read earlier that Sterling has already dropped in value by much more than the devaluation when Wilson was in office, yet this seems to be largely unreported.

because the public only understand 3 things at the moment;

- house values
- redundancy
- interest rates

anything of real value won't make copy as it won't sell papers

[davido140]

Plotloss said:

davido140 said:

Gun said:

I bet they're trying to introduce the Euro by making Sterling worthless!

Precisely my thinking. As soon as its 1:1 we might as well change over.

Never!

If its 1:1 they might as well change over.

Wont make a lot of difference either way really, apart from a picture of old queenie on the notes!

[digger_R]

Two year chart here

clicky

Edited by digger_R on Saturday 15th November 00:21

[Fittster]

Thanks.

So with graph showing a pretty bad drop for sterling against both the dollar and the Euro how come we aren't seeing any obvious affect in the real world?

[Stigmundfreud]

davido140 said:

Gun said:

I bet they're trying to introduce the Euro by making Sterling worthless!

Precisely my thinking. As soon as its 1:1 we might as well change over.

anyone noticed the euro style coins being introduced?

[fluffnik]

Stigmundfreud said:

anyone noticed the euro style coins being introduced?

Bi-metallic £2s?

€2 coins are the other way round.

[fluffnik]

Gun said:

I bet they're trying to introduce the Euro by making Sterling worthless!

Sterling has been fluff for quite a while.

[digger_R]

12 month chart here

clicky

The two year chart doesn't really show how far it's tanked in the last fortnight

[Olf]

using some very basic sums I reckon a barrel of oil is now only 25% cheaper for us at round $60 a barrel than it was when it was $142 in early summer.

[fluffnik]

Olf said:

using some very basic sums I reckon a barrel of oil is now only 25% cheaper for us at round $60 a barrel than it was when it was $142 in early summer.

Gordy looks much less super when you factor in the exchange rates.

I surprised that the US$ has stood up as well as it has.