It's not something that everybody notices every day, but it is something that has a big impact nonetheless. I am already noticing the prices are moving up for some of the things I buy from abroad. But I have feeling I am really going to feel it when I next travel abroad. But the indirect effects are the big ones. We are now considerably poorer than we used to be as a nation. On paper we are already behind France and not much ahead of California. This is all very real.
Basically the market verdict is that Britain is worth about 15% less outside the EU than it was inside it.
For people who believed that Brexit would actually be beneficial to the UK economy this is going to be very uncomfortable to explain. I even have some sympathy for them. Economic forecasts are so unreliable that it is easy to dismiss them. Although it was always a far fetched notion that leaving the EU would do the UK any good, I wondered if it would do that much harm. But seeing what the markets are doing to the currency in anticipation of the break itself is no longer a prediction. We can see what is happening. It doesn't look good.
Imagine what would happen if everybody had to take that 15% cut off the top line of their paychecks. Floating exchange rates are the only thing keeping the Government out of the tumbrels right now.
ReplyDeleteExactly, though the reality isn't so very different to an across the board pay cut. It just takes a bit longer to work through.
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