Soldato
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The next Conservative Leader thread.
- Thread starter Danthus
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The £ is currently up a whopping 0.22%. You'll have to forgive me if I don't break out the balloons and party hats quite yet...
The suddenly all-important FTSE 250 is up 3.25% and the FTSE 100 has reached an 11 month high. From an economists point of view I wish the pound could stay weak.
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Why, do you like paying more for everything?
Oh no I forget, it's all these high volume cheap 'exports' that suddenly get hugely more competitive when the price goes down, right? Most of the stuff we export is specialist and high end and isn't as price elastic as you like to pretend.
I bet Bob from Munich was going to buy one Range Rover but now will surely have two! And Cathay Pacific are thinking perhaps they'll upgrade to A380's so they can have 4 cheap Rolls Royce engines instead of the two on the 777 fleet.
The big beneficiary is our tourism industry - which is a good thing, but it doesn't offset the downsides.
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I think the Lords would probably wave it through, personally.
The sooner it's rid the better imo.
[TW]Fox;29768895 said:
Because I like more jobs and high growth in my economy. Of course, both those things mean that your currency will strengthen and you lose jobs and growth.
[TW]Fox;29768895 said:
lol - this is supply and demand 101, I can't actually believe you're disputing this. No, "Bob" from Munich isn't going to buy two Range Rovers but if he's deciding which luxury 4x4 to buy then a Range Rover looks more competitive than its rivals if it's EUR 10k cheaper than it was last month. More people buy more of them, exports go up.
How did it come to this :s
I guess one slight upside is she is a supporter of a comprehensive upgrade of the Trident program.
Good, we need to start moving forward quickly.
Those demanding an election might consider this BBC article. If you scroll down, you'll see that Britain has changed PM 24 times in the last century, and half of those were without a general election.
Anyway, IMHO, Cameron was going to be resigning regardless of the result. Obviously he anticipated a Remain vote. It would have been the perfect departure point. He would have won two general elections, saved the Union of Kingdoms, and the European Union.
Anyway, IMHO, Cameron was going to be resigning regardless of the result. Obviously he anticipated a Remain vote. It would have been the perfect departure point. He would have won two general elections, saved the Union of Kingdoms, and the European Union.
High end car manufacturers do not dynamically adjust list price to take into account currency fluctuations. The car is designed and built to be sold at a certain pricepoint - Land Rover are not going to reduce the list price of a Range Rover by 10k Euro. They are going to keep the price more or less where it is - inline with the price of the competition - and the benefit will be taken by the manufacturer and not the consumer and therefore doesn't translate through to inflated demand. The price in each market has already been calculated and set at the point at which supply and demand meet best - it's already been decided that if the Range Rover cost more, they'd lose too many sales, and if it cost less, they'd needlessly be giving away margin. That's why it's the price it is in every market it's sold at. Products like this are not sold using 'Cost Plus' pricing strategies.
Currency movements are not 'supply and demand 101' - they are more complex than that and have more effect than simply reducing price and thus increasing supply (or vice versa).
Which is a good thing for our domestic manufacturer's Indian parent company, but it isn't going to suddenly massively increase demand for the products. There is simply no need to price a Range Rover at 10k less than it's equivalent competing product so it doesn't happen.
So, clearly I'm not going to sit here and argue that a weaker sterling has zero effect on exporters. Clearly it does - for exporters who export low margin high volume products which are typically price elastic they are able to sell more competitively, but we don't do much of that. For exporters who export higher technology, higher quality or more specialist products they are able to increase their margins.
However the point is that these benefits are generally outweighed by the negative effect the incredibly weak currency has on the cost of items we import - it increases the price of raw materials, which increases everyone's costs and ultimately drives up the price of even domestically produced items. It increases the price of finished goods we buy from abroad - so your cars, your washing machines, fruit, etc etc all goes up in price (or the retailers suffer lower margins, which has destructive long term effects).
You constantly labour under the misapprehension that we are like China - a manufacturing powerhouse putting out millions and millions and millions of disparate low cost low margin products every day and shipping them across the world. For an economy like this a weak currency is beneficial because the products they sell are price elastic and the less the currency is worth, the cheaper they can sell volume items for.
So you want the pound to reach parity with the dollar do you?
Do you HONESTLY think that will be good for this country? Do you know what the average wage in the USA is in dollars compared to the average wage is here in the UK in pounds? Go and look it up and then tell me how rosy our lives will look if the pound plummets even more...
Generally, wasting billions on something you can't use is considered a bad thing. Trident seems to be a special case... but realistically, we will never fire them, and nor will anyone else.
The only <100% bonkers argument for renewing trident is giving the dockyards some work to do... but I'd rather the money was spent just about anywhere else. The rail network could use the money for starters.
We can and do use Trident. We are using it right now - a trident equipped sub is somewhere in the world ensuring we are a nuclear superpower.
Now whether we need to be a nuclear superpower and how much of a deterrent that is is another question, but that is the purpose of Trident and we are using it right now to achieve that purpose.
[TW]Fox;29769024 said:
So, if a Range Rover in Germany costs EUR 100k or £80k last month, and this month costs EUR 100k or £90k this month, then the value of our exports as reported in pounds has risen considerably (assuming constant demand). You're right of course, the price doesn't necessarily come down as a result of currency fluctuations - it was a poor example in the case of cars. Nevertheless the example was sound for some exports e.g. services where service providers are paid in pounds.
The UK exports something like half a trillion dollars in value a year. We are a major exporter. Yes we import more than we export and that's been a big weakness in the British economy for some time now, so a weaker pound will help to address that.
Agreed so a good thing we use Trident every day.
Exactly - I agree with all of this. However my point is that the benefit we receive is more than cancelled out by the disadvantage we get from the issue with the imports.
The export benefit helps to make the import disadvantage lower than it would have been, but is not sufficient to cancel it out and therefore on balance we'd still have been better off with the stronger currency.
Plus the other big one is that the weak currency import problem directly impacts the consumer whereas the weak currency export benefit only indirectly impacts them.
People feel the effect of more expensive products on the shelves, higher fuel bills and, yes, expensive holidays directly and it impacts consumer confidence. Whereas the warm fuzzy feeling of increased margin at Jaguar Land Rover is not felt directly by consumers.
Now you don't want a super strong pound either - some parts of Australia felt real pain when the value of AUD went through the roof, it had a serious impact on the tourism industry for example but what you want is a happy medium.
What we have now is a very weak currency thats getting only weaker.
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Thanks for your economic forecast, I look forward to the government reducing austerity measures
Soldato
- Joined
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Yeah, and?
You said they won't make a vote.
Can you name any that have suggested they might go against a government vote on the topic?
Thus far this hasn't been mentioned, libdems yes, labour have been crying amongst themselves, absolutely no word of any conservatives doing what the public didn't vote for, no matter what their views were.
So who did you name or mean?
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