Why has the Pound Sterling been falling?
Since July 2008, the Pound has fallen by around 25% against the Dollar and Euro.
Reasons for the decline in Pound Sterling include:
- Deep Recession forecast in UK Interest rates have fallen and are likely to fall further. Lower interest rates make the UK a less attractive place to invest hot money flows (get a better return elsewhere)
- Housing Crash. Continued fall in house prices increase likely hood of falling interest rates.
- Balance of Payments. 2007 has seen a widening of the UK current account deficit. This leads to an an outflow of foreign currency, putting downward pressure on sterling. This is important since drying up of capital flows due to lower rates.
- Strength of the Euro. Many are predicting the Euro is taking over the dollar as the world’s dominant currency. This is increasing demand for Euros and causing the Euros strength at expense of other currencies such as the Pound Sterling.
- Long Term Purchasing Power Parity. When the £ was worth $2, American goods were very cheap. The depreciation reflects a more realistic long term purchasing power parity.
- However, others suggest the dollars recent rise, reflects the fact investment trusts have been getting out of emerging markets and is mainly a technical correction.
- The Euro looks very strong, but as the Eurozone enters a full blown recession, the Euro is looking overvalued as well
- I don’t believe the Pounds fall is due to higher levels of government borrowing. UK borrowing isn’t much worse than our competitors and the impact of national debt on interest rates is mostly exaggerated.
Predictions for Dollar – Pound Sterling
After having reached a peak of $2.10. The Pound has slipped back to $1.50. But, I don’t think pound will fall further. Dollar has many weaknesses of the Pound.
Euro or Euros – What is the Plural of Euros.
A falling pound impacts on our exporters, the price of importers and future rate of economic growth. But, the most interesting thing about this post seems to be whether the plural of Euro is euro or euros.
I’m going for euros. Because I Just like using it. But, it is also what the EU recommend for non-legal documents.
31 comments ↓
What do you mean ?
Northern Rock has fallen, that could probably be the main reason. Hopefully the government can repair it.
I Cannot find on your site any predictions for future exhange rates for the £/Euro
The plural of euro is euros, without the apostrophe.
Sad to see the pound go down – I’ve been watching it fall over the past few months against the euro. Currently it lies at £1 = €1.271
Hi John,
Thanks for pointing out error on euros. I thought it was wrong when I wrote it.
The weak pound is not so good when I travel to France
The plural of euro is euro. There is no ’s’ on the end at all.
Not necessarily see:
http://www.economicshelp.org/blog/euro/what-is-the-plural-of-euro/
Official practice followed in English-language EU legislation is to use the words euro and cent as both singular and plural. This practice originally arose out of legislation intended to ensure that the banknotes were uncluttered with a string of plurals (as the Soviet ruble notes were).
however it is still used as a countable noun …..
one euro , two euros…..
Euro, schmeuro, who cares? We are now paying the price for hanging onto the tail of the American tiger.
A pity we didn’t stop playing at Empires and start investing in the Social Contract. What is “Great” Britain now? An unstable culturally amnesiac disaster area with a lousy climate to boot. And now it’s even harder to get out, thanks to Sterling that no-one wants.
Robbo, as in Red Robbo, the communist activist and his like that brought Britain to it’s knees. Saved at the last minute, from Lucky Jim and a long line of socialist no hopers, by Blessed Margaret.
The plural of euro is euro.
Why is it so hard not to add a spurious ’s’? You don’t say “ten quids”, do you?
The Directorate-General for Translation, the EU’s translation service, recommends that in English language texts the regular plurals ‘euros’ and ‘cents’ should be used in non-legal documents intended for the general public.
http://ec.europa.eu/translation/writing/style_guides/english/style_guide_en.pdf
Since this text is non legal document I like to follow the Directorate- General of the EU! (the name sounds suitably impressive and eurobureucratic)
BTW: I accept donations in either Euro, Euros or Pounds. But preferably I prefer Euro plural.
I find all comments above relating to the future financial stability of this once great country of ours and the longstanding debate of the falling pound against the euro and the dollar, however, I think we should ignore this minor debate and get back to the real problem and the one devine question we should ask ourselves? Is it Euro or Euro’s/Euros?? Anwer this and all other lifes problems will dissapear into insignificance..
what about euroes ?
ello, my leetle eengleesh peepples! Pierre ere – ow about Eureaux?
..the point being that plural “s” doesn’t apply in some european languages. One of the reasons why “euro” is used as the singular and plural because in Greek, “euros” sounds the same as the word for urine..
its neither euroaux,euroes,euro’s its just plain and simple. The pound is goosed so jump while you can …..last one out put the lights out.
I’ve just used this website to explain to my 13 yr old daughter about the current recession and she wants to babysit and give me the money. my son,10 wants a paper round and give me the money. my 7yr old will probbably go up a chimney!! I’ve tried over 8 years to support family. lost £35,000 on house £7000 on shares now paying 28% on cr cards which mge wld normally pay but not now. after 18 years paying my way, now have two sick parents aswell don’t know what to do. have to ride this storm like everyone else. God help us all!! And I was always for keeping our pounds sterling. hope the queen appreciates that! and, by the way, if it wasn’t for people that had nothing, no-one would have anything.
what is the ruppe value of Pound ,Euro,Dollar
Thaks
Rahul
I looked into this site to read a meaningful debate on the strength of our pound; little did I know we would be correcting each other’s English. Let’s concentrate on the matter at hand. So, any intellectual out there can tell me when we are looking to come out on the other end of this horrid recession?
analysts predict by the end of 2011, but i reckon its going to last for longer than that, simply because historically recession did not take one, two years to recover from, the world recently recovered from major crisis, relating to the dot com bust and all the other little financial bubbles that brust and left individuals like you and me on the downside. and today we have seen another financial crisis, the credit crunch as its know was bought about by sub prime lending and greedy directors, this required governments to borrow money leaving them with fiscal deficit, and in my opinion until this deficit is repaid, britain will not come out of recession.
What are exactly the advantages and disadvantages of a falling currency?
Would it have been a good idea to have joined the euro currency say 7 years ago? Why or why not?
Pound will get back up to 1.8 to 1.9 within the next 6 months or so.
We have been fed so much anti-European propaganda by those who, either don’t know, or have a vested interest in keeping us out of the Eurozone. There is a global crisis but against other currencies, the value of Sterling has plummeted in comparison with that of the Euro. The values of our homes, our holdings and our stock have all fallen. The cost of importing raw materials for the manufacturing industries has escalated because we have to use “weak” sterling. Most of our manufacturing base disappeared years ago, so we don’t make much to export, anyway. A short while ago we were told that the UK was the fourth richest economy in the world. This was mainly due to the trust in the City and our service industries. Were these more lies and propaganda?
We should immediately launch a bloodless, military attack on Brussels and Strasbourg and let the EU armed forces win. We would then be forced into the Eurozone and the governance of this country would be in the hands of more competent and experienced politicians!
The British people would then be able to have the benefit of the same standard of living, education and training and health care as that enjoyed by the citizens of mainland Western Europe.
There’s many a true word spoken in jest!
[...] Falling value of Pound Sterling [...]
[...] operations – strangely they appear to have overlooked the simple fact that since July 2008, the Pound has fallen by around 25% against the Dollar and Euro. Oh dear. Perhaps someone needs to invest in a new [...]
You can clearly see by some of the predictions stated above that no one really has a clue. So let me tell you how it really is. With Bush & Blairs plains since in power…..you must know by now what they were being the most crooked politicians ever in power across the pond consecutively, the result is showing now of their work. They are richer, everyone else is worse of. With neo-con emmigration policies, matters will only get worse. You’re all in it for the long run people. No ones going to get rich quick except those that fooled you!
I reckon our Government got it wrong in beleiving that staying put with sterling was a good idea on the basis that we were becoming the centre of the Universe in the financial world. Well that theory has been well & truly scuppered, so I think it’s time to eat humble pie & join up with the rest of Europe. Our little country with little or no manufacturing capability & an ever smaller voice in the world of politics should just wake up & smell the coffee. Euros surely? Dollars,cents, Pounds & pennies.
every country with a strong currency, purposely and with political reason……..the country let and attract overseas investers…… with a long period of time the government lets depreciate the national currence thus getting the huge benefit….. when investers demand their monies. ita well known policy so nothing abnormal in pound decline
Going to australia in july what will the pound be like then
Frank buy your Aussie dollars now!!! The UK Pound is a basket case. We will default on our debts, re-value and de-value, then lose a third of our wealth.
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