A liitle bit of good news on the UK economy.

[Purple Dalek]

Like the firm I mentioned. They buy sub assemblies from Germany and Italy in Euros. They engineer and package the final product in the UK and then ship it to France or Spain to their customers. I guess that if they're switched on to this then they'll have a Euro account so that the French/Spanish customers pay in Euros and the UK firm I'm talking about then pays their German/Italian supplier in Euro's, the net effect on them would be zero. But, since their "added value" and their profit is in £'s then their profit margin has increased allowing them to trim their Euro prices as the £ has sank. Hence they win a lot more work. I guess that's how it works???

Yes, what you say is broadly correct, they can reduce their cut, still achieve the same profit, and be more competitive, but this is only a temporary effect until the wage pressure of their workers having to pay higher prices, forces them to increase prices. That the government is allowing the unemployment figures to rise, after so many years of inventing non-jobs, can be seen as an approach to discourage this.

[Fred Bloggs]

Yes, what you say is broadly correct, they can reduce their cut, still achieve the same profit, and be more competitive, but this is only a temporary effect until the wage pressure of their workers having to pay higher prices, forces them to increase prices. That the government is allowing the unemployment figures to rise, after so many years of inventing non-jobs, can be seen as an approach to discourage this.

I can see where you're coming from. I can see UK inflation heading north of 10% pa by 2011. The real shame is that the "high tech" sub assemblies are German or Italian. In the 1960's and 1970's they would definately have been British manufacture. My guess though is that in 10 years time the Chinese will take over the hardware manufacture anyway even if the design aspect stays in Europe for another 20 years yet.

[Purple Dalek]

I can see where you're coming from. I can see UK inflation heading north of 10% pa by 2011. The real shame is that the "high tech" sub assemblies are German or Italian. In the 1960's and 1970's they would definately have been British manufacture. My guess though is that in 10 years time the Chinese will take over the hardware manufacture anyway even if the design aspect stays in Europe for another 20 years yet.

There is a little factoid that misses most people. We don't even do much of the design any longer.

What happens is a company wants to make a new kettle, for example. They send their design team over a brief, they wanders around the trade shows, thumb through a few brochures, pick a few kettles. They try the kettles against the target customers, who pick one. (There's a great piece of software to help in this, and if you take a product from just about any company and feed it's details in you can see how pervasive its use is.) The company then sends their graphics over to china which are then put on the kettles, which are delivered direct to the stores.

[expat]

Not so. Your pound is worth as much as it was yesterday - just not against foreign currencies, which isn't a problem until you need to spend pounds overseas. Nows the time to hold onto your pounds until things improve - in fact invest your squids in the UK.

"It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued."

Harold Wilson, 1967

[BrilloPad]

"It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued."

Harold Wilson, 1967

Maybe GB will start blaming the gnomes of Zurich?

[Fred Bloggs]

There is a little factoid that misses most people. We don't even do much of the design any longer.

What happens is a company wants to make a new kettle, for example. They send their design team over a brief, they wanders around the trade shows, thumb through a few brochures, pick a few kettles. They try the kettles against the target customers, who pick one. (There's a great piece of software to help in this, and if you take a product from just about any company and feed it's details in you can see how pervasive its use is.) The company then sends their graphics over to china which are then put on the kettles, which are delivered direct to the stores.

Cripes, we are doomed then.

[expat]

I note that it was said back in 1967, and has been said many times since, that a devalued pound would help exports. In fact what has happened every time is that exporters have just sat back and taken the higher profit, rather than build more business. It's quicker and easier.

[deano]

In a small way this has already been apparent, a colleague was looking to buy a camera from Amazon. They spent a little while thinking on it. Went back a few days later just to see the price had increased 25%.

I had exactly that experience! I looked at a little guitar multi-fx unit and amp simulator (the Korg PX4D) on Amazon and there was 1 in stock which was £74.99. It had sold out when I went to order it the next day. I looked a few days later to see if more stock had arrived and it had but it was priced at £99! That's a 33% increase in a few days. I'm still trying to figure that one out. Credit crunch, what credit crunch?

I'll wait until the sales start!