FionaK |
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| If anyone is clued up about the issue can they explain to me why a fall in sterling is a bad thing?
As I understand it a fall in the value of a currency makes exports cheaper and imports more expensive. Since the balance of trade is a long standing problem for the UK (though not much talked about now) it seems to me that this is a good thing for the UK economy, at least in the abstract terms we are encouraged to believe are all that matters.
It is true that more expensive imports will have an adverse effect on the cost of living and on inflation. But the effect on ordinary people is not something that bothers the government, normally, so why is it important on this occasion? They have been content to see a fall in the standards of living of most people for a very long time. Are we supposed to believe it is an issue for them now?
Why are people assuming that the overvalued pound is something to be happy about?
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