Alistair Darling admits post election spending cuts worse than the 80s

[TimberWolf]

You have it back to front. Weak pound = good. They have no intention of trying to see gbp strengthen. This is our chance at competitive advantage over our main trading partners in Europe who cant devalue as freely. 1gbp = 1eur would be suit just nicely. From a macro perspective.

Only in the short term. We import more than we export, so eventually prices, inflation, interest rates, insolvencies, etc, go up.

[HairyArsedBloke]

My daily forex report tells me that there are a load of stops lined up at 1.485. I wish I understood what that means.

Not a lot now that Cable is at 1.4800

[HairyArsedBloke]

You have it back to front. Weak pound = good. They have no intention of trying to see gbp strengthen. This is our chance at competitive advantage over our main trading partners in Europe who cant devalue as freely. 1gbp = 1eur would be suit just nicely. From a macro perspective.

Only in the short term. We import more than we export, so eventually prices, inflation, interest rates, insolvencies, etc, go up.

Aye, it is inflationary for a country like the UK that imports so much. It also transitory as other countries try to do the same trick. It is also deceitful as it is only hiding the hidden flaws in the productivity in the economy. So, a typical nuLieBore ploy really.

[Pickle2]

We import more than we export,

That's irrelevant. A drop in GBP would decrease imports and increase exports. Its a race to the bottom. The Germans are playing a smart game with the euro right now. It suits them. The last thing anyone in our situation wants right now is currency strength.

[TimberWolf]

That's irrelevant. A drop in GBP would decrease imports and increase exports. Its a race to the bottom. The Germans are playing a smart game with the euro right now. It suits them. The last thing anyone in our situation wants right now is currency strength.

And what do you think happens if, as you suggest, we decrease our imports? If devaluing were as good as you say, we'd be forever at it. Just print money. And of course agencies lending us vast amounts of money won't be too keen on being paid a low interest rate on a weakening currency. At some stage the risk must be that a slide backed up with smoke and mirrors and tough talk, turns into an avalanche.

[minestrone]

That's irrelevant. A drop in GBP would decrease imports and increase exports. Its a race to the bottom. The Germans are playing a smart game with the euro right now. It suits them. The last thing anyone in our situation wants right now is currency strength.

That model went about 20 years ago. We have about 100 million people closer to Europe than us with the same manufacturing skills that are willing to get paid 30 pence an hour.

[Gonzo]

If devaluing were as good as you say, we'd be forever at it.

We are.

It has been the standard British response to an economic crisis in the past. The problem is you just can't keep on doing it forever.

[Gonzo]

As to what Darling is up to.

He is still quite young for a career politician, 56, and could easily see through another two or three parliaments so I suppose that it is possible that he is trying to rehabilitate his reputation to keep his future career options open.

[The_Equalizer]

No one has any idea of the problem. We are nowhere near anything like the three day week. There would probably be social meltdown well before that. Imagine the current generation putting up with lights out at 10pm. Dear Britannia needs a right good kick up the arse.

[The_Equalizer]

Argh... I might just like Darling:

BBC News - Darling concedes cuts could be tougher than 1980s