yodobashi
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What Happened To The £ Sterling?

Fri Sep 18, 2009 6:19 am

In recent months, the pound £ sterling has crashed to new depths.

I don't profess to understand money markets but I do know that this year, more than ever before, it's crap living in the UK as it costs us more to holiday abroad than ever it did before.

Check out some of these exchanges rates:

- Previously ¥220 Japanese for £1 - now ¥150 (dropped as low as ¥125)

- Previously $2.50 Australian for £1 - now $1.85

- Previously $2.25 Canadian for £1 - now $1.75

- Previously €1.60 Euro for £1 - now €1.10 (dropped as low as £1 for €1)

- Previously ฿75 Thai for £1 - now ฿55

The only other currency which seems to be 'suffering' the same as ours is the US$. Do our firends across the pond find it more expensive to travle abroad too?

I'm no expert but I thought this recession was global? So why then do some currencies retain their strength, to the deteriment of that country whilst others have crashed? (I read that Japanese exports to the EU have dropped 48% on this time last year. For example, some Nikon camera gear is now around 35% more expensive than in Nov 2008!)

How is this affecting you all folks?
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ManuCH
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 6:27 am

As a non-UK resident, the pound going down has made traveling to the UK for holiday much cheaper than before. I've been to London recently and I felt like everything had a 30% discount.

I'm no economy expert (more precisely, I don't know anything about economy), so I can't give a reasonable explanation about why this is happening. But I understand that this situation is less than optimal for UK residents.
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MadameConcorde
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 6:43 am

The British Pound has lost a lot of value over the last two years. I wonder if this weakening of the £ is done on purpose by financial institutions so to force the UK to join the Euro?  Yeah sure  Confused

This does not happen by chance. There has to be an underlying reason.
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SANAV8R
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 8:11 am



Quoting Yodobashi (Thread starter):
The only other currency which seems to be 'suffering' the same as ours is the US$. Do our firends across the pond find it more expensive to travel abroad too?

Countries like Australia (1 USD/1.45 AUD) Mexico (1 USD/13 MXN) Canada (1 USD/1.05 CAD) are generally more affordable. I bought many things in Australia and excursions and when I checked my bank account it was all much less than I thought.

Asia varies, I went to Japan in 2007 when the $1 bought ¥120, and this July it bought me only around ¥90.

Scandinavian currencies are more expensive than Euro, but I don't see the Euro lowering for years to come. I don't think it will ever go back to par or below like it did so many years ago.
 
offloaded
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 10:01 am



Quoting MadameConcorde (Reply 2):

You aren't alone in suspecting this.

Whilst a weak pound has been advantageous for Euro based tourists (or UK tourists as there is no difference in rates between a GIP and a GBP) coming to Gibraltar for example, it has had a big impact across the Costas and the Algarve where Brits visit in large numbers, not to mention GBP based pensioners/retirees/expats who are 35% down in income.

I actually do not see how the EUR is so strong considering how many Eurozone countries are in real trouble.

The "wisdom" around here seems to be that it will be around GBP1.00 / EUR1.30 by the end of the year. We shall no doubt see.
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OA260
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 10:12 am

Living on the Border between the Euro ( ROI ) and Pound ( UK ) its great for me as I shop weekly in Northern Ireland.
 
jush
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 10:37 am

Buying Xbox 360 games on amazon.co.uk is a blast, too. Games are cheaper in the UK anyway and now you save up to 30€ on a single new game with transport included.

Yeah

Regds
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ltbewr
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 11:12 am

The financial crash in the USA and in part in the UK devestated the value of those currencies. It is further compounded by trade imbalances, particulary with China by these countries.

While the exchange rate is a factor discourging Americans from traveling to Europe/UK, the declining incomes and massive debt due by many (especially college students), less vacation time avaiable (unlike the madates of most of Europe) but also a declining interest in travel including outside the USA or adjacent areas are other factors.
 
ME AVN FAN
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 12:12 pm



Quoting ManuCH (Reply 1):
the pound going down has made traveling to the UK for holiday much cheaper than before

It has been quite similar in the 1980ies, but then in the late 80ies and in the 90ies, things in the U.K. if converted into CHF became gradually rather expensive. I think that the £ for a while now was overvalued. Interesting is that on another forum some Englishmen told me about the impending coming down of the £ weeks ago.

Quoting MadameConcorde (Reply 2):
I wonder if this weakening of the £ is done on purpose by financial institutions so to force the UK to join the Euro?

What financial institutions could be interested in lowering (not "weakening") the £ ?? Financial institutions are not interested in currencies disappearing into the Euro. The only "Financial institutions" possibly interested in lowering the exchange rate of the £ are the Bank of England and the U.K. finance ministry, as such a development is good for the British export industry and for the British INbound tourism, and will keep more holidaymakers inside Britain and will possibly even reduce imports. And if you finally got it right about the Euro, it is bad news for the finance industry in Switzerland. Also people favouring the introduction of the Euro in principle overhere fairly well realize that an entry of the U.K. into the Euro would lead the speculators towards Switzerland, where the national bank had to spend millions on "foul money" in order to stabilize the CHF, as the resulting fluctuations otherwise would be horror to the export-industry, on which Switzerland basically depends.




Quoting OA260 (Reply 5):
Living on the Border between the Euro ( ROI ) and Pound ( UK ) its great for me as I shop weekly in Northern Ireland.

Are you living in the OldBushmills factory ? A shareholder there ? So that you could offer a sampling tour ?  Big grin  Wink
 
britjap
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 12:20 pm



Quoting Yodobashi (Thread starter):
- Previously ¥220 Japanese for £1 - now ¥150 (dropped as low as ¥125)

At one point £1 was worth more than ¥240! Then in the space of a couple of months it had crashed down to about only ¥120!!!

The recent changes between these two currencies always seem to hurt me whichever way they are going. My money/savings always seems to be on the wrong side of the exchange rate at the wrong time!!!

ITS DRVING ME CRAZY!!!!!  weeping 
 
PanHAM
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 12:39 pm

I remember the days when one pound was 9 Deutschmarks, but that's a long time ago and when they still had pound shilling and pence and bed and breakfast was a guinea. Would be about € 4,50 these days.  Wink Which, OTOS explains why and how the relation of the currencies always reflect the costs of living.

Britain has missed the boat to join the Euro some time ago, may be when the pound was at 1.60/1.50 € . They could have even engraved the Queen on the flip side of the coins.

Quoting ME AVN FAN (Reply 8):
is good for the British export industry

their biggest industry is banking and services, plus incoming tourists. .
powered by Eierlikör
 
ME AVN FAN
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 1:14 pm



Quoting PanHAM (Reply 10):
their biggest industry is banking and services, plus incoming tourists. .

the incoming tourism will profit from a lower exchange-rate. And I doubt whether banking is more important than the export industry.
 
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Braybuddy
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 2:09 pm

Correct me if I'm wrong, but isn't this part of the UK Government's policy of stimulating the economy by "printing" more money? ("quantitative easing" to give it it's proper term). It's used by governments when interest rates are are zero or thereabouts.

Tourism goes up, as do exports, because both are cheaper for foreigners. In doing so, the UK will emerge from recession quicker. It's nothing to to with the EU or the euro, but hey, why let the facts get in the way of a good EU scare story?
 
noelg
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 2:13 pm

How strange that the tables have turned, where once we travelled to Europe for a bargain, and now it's the opposite!

Really difficult going abroad, I get a a £20 per night meal allowance for work, and when on a course in Brest, France earlier this year was struggling to get a pizza and a pint for that amount!
 
babybus
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 2:18 pm

Well I hope the Pound gets some of its old value back. I'd like to be able to afford to leave the Uk for a holiday at some point this year.

Flights out are cheap but it's the cost of accommodation and the incidentals like eating and drinking that push the costs up out of proportion.
and with that..cabin crew, seats for landing please.
 
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yowza
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 2:36 pm

Q) What happened to the Euro?
A) Gordon Brown.

YOWza
 
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OA260
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 2:40 pm



Quoting ME AVN FAN (Reply 8):
Are you living in the OldBushmills factory ? A shareholder there ? So that you could offer a sampling tour ?    

No but there is another Distillery near me . Big grin  Wink
 
ME AVN FAN
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 4:11 pm



Quoting OA260 (Reply 16):
there is another Distillery near me .

Which one ? Jameson or Tullamore Dew or Paddy ?
 scratchchin 
 
GDB
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 7:53 pm

No EU plot, rather a result of allowing an impossible to sustain bubble, fuelled by 'casino capitalism' go on under regulated.
We did it to ourselves.
And so did the US.

And who is leaving the recession fastest, with far less economic damage?
Why it's those French and Germans, y'know, the ones whose economies were soooo over regulated, who did not 'get' the need for creating bubbles on housing, speculation with the stunning ignorance of history that went with it.
How our 'Masters Of The Universe' and their political poodles sneered for all those years, financial services? That's for making money from money, not helping to fund the real economy.
Bubbles never burst. right?

Mind you, from an industrial viewpoint, a lower £ is a good thing.
 
Bongodog1964
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 8:01 pm

What has happened to the £, quire simple a Scottish incompetent called Gordon Brown. He banged on about economic prudence for the best part of a decade, whilst flogging off every Government asset he could think of, even the tax offices have been sold to a company based in a tax haven and leased back. All our new infrastructure has been financed through the Privaye Finance initiative, whereby all new schools, hospitals etc are leased over 30 years. In addition he allowed the state payroll to expand greatly as well. Whilst houseprices and wages were going up and up, the public felt good and kept voting Labour.
We were told that our economy was doing far better than others.
Of course it was all a load of rubbish, and the money markets now don't like sterling any more.
 
exFATboy
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 8:36 pm



Quoting Yodobashi (Thread starter):
I'm no expert but I thought this recession was global? So why then do some currencies retain their strength, to the deteriment of that country whilst others have crashed?

The recession is global, but some countries have been hit much harder than others, depending mainly on how overblown their real estate "bubble" was, but also on the stability of their banking sector, trade imbalances, etc. The US and UK have been the hardest hit, while Canada has been hit relatively lightly and I'm not even sure that Australia has technically gone into recession. It's no coincidence that Canada and Australia have pretty much the most conservative banking sectors in the industrialized world.
 
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RE: What Happened To The £ Sterling?

Fri Sep 18, 2009 10:37 pm



Quoting ExFATboy (Reply 20):
depending mainly on how overblown their real estate "bubble" was

this is incorrect. In Switzerland, the UBS MIS-invested into the US real estate bubble, and so did many other European banks. When the bubble came to its end, banks like the UBS were badly hit. In case of UBS, it was UBS president Ospel (of Swissair crash fame) who wanted to make his bank the international nr. 1 and right at present the bank of partially state-owned and could only survive thanks to federal state aid.
 
Viscount724
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RE: What Happened To The £ Sterling?

Sat Sep 19, 2009 12:40 am



Quoting Braybuddy (Reply 12):
Tourism goes up, as do exports, because both are cheaper for foreigners.

Tourism also goes up because many Brits are no doubt now spending their holiday money at home instead of on foreign travel.
 
dxing
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RE: What Happened To The £ Sterling?

Sat Sep 19, 2009 2:47 am

The exchange rate is one reason I just transit the UK and EU and head for the Ukraine. Cheap rooms, meals, drinks, and more pretty women than you can take the time to look at. If you are a U.S. citizen you have to be on the look out for great getaway places like this. Costa Rica is another favorite. One of these days maybe our political leaders will get our financial house in order but by then, by the sound of current rumblings, the UN will have decided on a one world currency!!!  stirthepot 
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BNE
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RE: What Happened To The £ Sterling?

Sat Sep 19, 2009 3:58 am



Quoting Braybuddy (Reply 12):
Correct me if I'm wrong, but isn't this part of the UK Government's policy of stimulating the economy by "printing" more money? ("quantitative easing" to give it it's proper term). It's used by governments when interest rates are are zero or thereabouts.

Tourism goes up, as do exports, because both are cheaper for foreigners. In doing so, the UK will emerge from recession quicker. It's nothing to to with the EU or the euro, but hey, why let the facts get in the way of a good EU scare story?

 checkmark 

If you can't lower the interest rates any more than you have to start printing more money.

A company that exports goods and services means that you can sell things on the world market cheaper.

For the majority of people your cost of living goes up but it hopefully keeps more people in a job.
Why fly non stop when you can connect
 
MD11Engineer
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RE: What Happened To The £ Sterling?

Sat Sep 19, 2009 9:08 am



Quoting ME AVN FAN (Reply 21):
Quoting ExFATboy (Reply 20):
depending mainly on how overblown their real estate "bubble" was

this is incorrect. In Switzerland, the UBS MIS-invested into the US real estate bubble, and so did many other European banks. When the bubble came to its end, banks like the UBS were badly hit. In case of UBS, it was UBS president Ospel (of Swissair crash fame) who wanted to make his bank the international nr. 1 and right at present the bank of partially state-owned and could only survive thanks to federal state aid.

Could it be that the USB has alse been gambling on the british and American real estate markets? From what I understand, the only German banks which got burned in the recent crisis were those which decided to go for a quick profit and to play on the above mentioned markets.

Quoting Braybuddy (Reply 12):
Tourism goes up, as do exports, because both are cheaper for foreigners. In doing so, the UK will emerge from recession quicker.

This only works if the country still has a manufacturing industry to export products. From what I understand, since Attila the Hen the UK has more or less pulled out of the game of manufacturing goods and just relied on service and fincances.

Jan
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ME AVN FAN
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RE: What Happened To The £ Sterling?

Sat Sep 19, 2009 10:47 am



Quoting MD11Engineer (Reply 25):
Could it be that the USB has alse been gambling on the british and American real estate markets

it not only can be, it is a fact. Not the British real estate but the US one. UBS expanded the US real estate market thing so much, that they for some years had more employees working in the USA in this sector than in all the rest of that company which is completely idiotic. CEO Ospel wanted to make the UBS into the largest bank of the world. Reminds me of Philippe Bruggisser and "his" Swissair, the biggest airline in the world. UBS only survived thanks to a federal aid package which did cost four times as much as a rescue package for Swissair would have cost. But of course, the federal government is infested by bank people and not aviation people  Yeah sure

Quoting MD11Engineer (Reply 25):
From what I understand, since Attila the Hen the UK has more or less pulled out of the game of manufacturing goods and just relied on service and fincances.

No, the UK has not pulled out from manufacturing goods, but the UK industry widely belongs to Attila the Hun (Japanese, Chinese, Malaysian, Indian, US-American and Canadian companies)  Big grin
 
exFATboy
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RE: What Happened To The £ Sterling?

Sat Sep 19, 2009 4:25 pm

Quoting ME AVN FAN (Reply 21):

this is incorrect. In Switzerland, the UBS MIS-invested into the US real estate bubble, and so did many other European banks. When the bubble came to its end, banks like the UBS were badly hit.

True, I was over-simplifying, you are correct to point out that foreign banks were affected by their holdings in "bubble-country" real estate, and in turn the banks' problems have a knock-on effect as those banks cut back on lending. But I was mainly doing a quick comparison within the "Anglosphere", where Canada and Australia have weathered the storm much better than the US or the UK. Europe has fallen in between, but has not seen as dramatic an increase in unemployment as the US. Since international banking is a large part of the Swiss economy, Switzerland has been particularly hard hit.

Quoting MD11Engineer (Reply 25):
From what I understand, the only German banks which got burned in the recent crisis were those which decided to go for a quick profit and to play on the above mentioned markets.

True, several German banks were involved - Deutsche Bank had completed acquisition of MortgageIT, a large US residential mortgage firm, in 2007, and had been aggressively expanding its mortgage securitization operations in the US as well. WestLB and BayernLB were also hit hard.

[Edited 2009-09-19 09:25:27]
 
GDB
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RE: What Happened To The £ Sterling?

Sat Sep 19, 2009 5:01 pm

Not just Brown Boondog, all of them, for 30 years.
If you questioned it, you were old school, didn't get it, certainly did not get into office.
Which leads us to another of the responsible parties.
Us.
Who also fuelled these impossible booms?
Much of the public.
 
ME AVN FAN
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RE: What Happened To The £ Sterling?

Sun Sep 20, 2009 8:29 am



Quoting ExFATboy (Reply 27):
Since international banking is a large part of the Swiss economy, Switzerland has been particularly hard hit.

On the positive side, the UBS crisis has kept the Swiss Frank at a stable level. THIS, in combination with the relatively good development in Germany and France now help the Swiss export industry, which in fact is far more important than the banking sector. Another positive is that shops in cities like Zurich had to change their assortment towards less expensive merchandise, and even bars and restaurants in downtown have come down with their prices. And those shops and shops-chains who already WERE on the less expensive side are now those who profit, because many bankers had to "size down" and quite many even to change into other branches of the economy with far lower salaries.

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