Reply to: Even at parity with the Euro, is the pound still overvalued?

[Sysman]

We had high interest rates because Labour left the country with 25% inflation, printing too much money again.

I don't think that negates what I said.

[expat]

All the examples that have been given are bad ones IMHO, though that does not prove or disprove the original point. They are inviting because they are glaring, but each one is a special case.

I do blame both Thatcher(/Major) and Blair/Brown: both encouraged a culture of living without paying the true cost, each in quite different ways.

But that is by the way: it it a quite separate matter that the UK has been living beyond its means for a long time: decades in fact, it didn't start with Thatcher.

We have always tried to do so: ISTM that there have been 3 main phases of losing national wealth, and we have tried to disguise rather than fix each one.

1. After Victoria, our spectacular empire-fuelled growth started to decline. We were still wealthy but the tide had turned.
2. In WWII we spent all we had. No-one would have had it any other way; but after the war we failed to rebuild, and such wealth (and loans) as we had, we spent on attempting to rebuild the same old empire. A generation too late; and not for national prosperity but for our politicians to keep feeling important.
3. In the 1970s we stopped making and selling things. Through the following decades we continued that trend, sometimes willingly, sometimes not.

But I do not know what that means for the exchange rate. I was the one who first said here that it might not stop at parity, but that was to draw people's attention to the idea, not because I am convinced of it. I think it is true that the Euro's pain is still in the (imminent) future whereas the pound's is now; but although I see the euro retreating, I don't see the pound recovering. Might be wrong though

[dinker]

That argument always struck me as a con. We had a strong pound because of high interest rates, not North Sea Oil. We had high interest rates because Maggie put them up in the first place.

It knackered manufacturing with the double whammy of the cost of raising capital and making export uncompetitive.

We had high interest rates because Labour left the country with 25% inflation, printing too much money again.

[AtW]

Expect a huge flood of Europhiles coming here for the Jan sales. The pound sucks and that made us a piss sight poorer in euro terms from only 1 year ago.

Once Jan sales are over all new stock will come in at higher prices due to pound being down (if it stays down which I think it will).

Now that will make a lot of people in this country feel real poor.

[Turion]

UK is now cheaper on many counts. Petrol here is cheaper than France and most stuff in shops is cheaper. Off-peak trains in UK are cheaper, although in general public transport in UK is more expensive. Booze in pubs here is cheaper than in most Euro pubs. Shop bought alcohol is generally cheaper in Euoland due to much lower taxes, but supermarket deals mean that the difference is not so much. Expect a huge flood of Europhiles coming here for the Jan sales. The pound sucks and that made us a piss sight poorer in euro terms from only 1 year ago.

[SantaClaus]

Well, I made 200 pips buying EURGBP today.

Current price is 0.9286 and I intend to hold it for another 700 pips until we hit parity.

[minestrone]

Forget the £4 single tube fare. It's a stick to get people to use the carrot that is the Oyster card or Travelcard. I pay £24 a week or £96 a month, which is still expensive.

Pah, 450 a month for my train fare.

[swamp]

I've not used the London Underground in years, is there really a £4 min charge now? If so that's horrible compared to every metro system I've used in Europe in recent years.

Forget the £4 single tube fare. It's a stick to get people to use the carrot that is the Oyster card or Travelcard. I pay £24 a week or £96 a month, which is still expensive.

[TykeMerc]

It's hardly a mystery that we get awful value for money in the UK, this hasn't got a lot to do with the current exchange rate.

Duty on wine/beer/spirits/cigs is huge here compared to almost everywhere else

Public transport in the UK has been very expensive for decades while delivering an atrocious service.

I've not used the London Underground in years, is there really a £4 min charge now? If so that's horrible compared to every metro system I've used in Europe in recent years.

[Olly]

Alcohol is not a good comparison because of diff taxes...i presume they are lower in Germany. Many things are cheaper in Uk, clothes spring to mind as do electronic goods and that was before dramatic 20% GBP crash!!!

You don't rent an Oystercard, you pay a deposit, same as you do for every flippin other item in Germany!

You pay less for using Oyster because it allows phase out of cash on public transport...why are you asking such stupid questions?

[Francko]

I bought bottle of reds in Regensburg - which is close to Munich - for under 2 Euros. Mind you it was a couple of years ago, so prices may have changed. Point is, a drinkable bottle of wine in the UK normally starts here at 4 pounds (and even then you're putting your life in danger).
What about the public transport point then? Do you have a four pound minimum fare on the Munich underground?

All these examples don't keep up to the point really. Wine is imported and therefore expensive (and not imported from cheap countries either).

London underground is all in the hands of privates. You do wonder what would the real cost of the Paris metro' be if the whole France did not contribute?

Having lived in many countries in Euroland and in England you do get a feeling of where you spend more and where less with a certain amount of money. With the pound at 1.5 you could feel that it was overvalued. At 1 to 1 UK is a bargain and so definitely underpriced. Might not be that casual that the big mac index is set at 1.35 (UK 2 pound, Euro 2.7 euro), their economists are probably much more knowleadgable then the ones in the government offices...

[PRC1964]

4 pound wine might be 3 euro here, not less, El diablo actually costs more here.

Any dick who doesn't use an Oystercard deserves to pay 4 quid.
There's no discount equivalent on in Munich except for a stripe card
I don't have to disprove, you have to prove.

Why the hell should I have to "rent" an Oyster card for the 2/3 times a year I enter London?

Why should a tourist be made to get one when they are here for one day?

[minestrone]

When I was in Berlin last month I was shocked how cheap it was to get the train from the airport to the city station. Zurich was the same last year.

In the UK they would screw you over knowing that if you never picked the train you were at the mercy of the Taxi drivers who would really screw you over.

[MrMark]

4 pound wine might be 3 euro here, not less

You've just proven my point. (many) things still cost more in the UK than Europe. Perhaps the pound's got further to fall.

[Olly]

I bought bottle of reds in Regensburg - which is close to Munich - for under 2 Euros. Mind you it was a couple of years ago, so prices may have changed. Point is, a drinkable bottle of wine in the UK normally starts here at 4 pounds (and even then you're putting your life in danger).
What about the public transport point then? Do you have a four pound minimum fare on the Munich underground?

4 pound wine might be 3 euro here, not less, El diablo actually costs more here.

Any dick who doesn't use an Oystercard deserves to pay 4 quid.
There's no discount equivalent on in Munich except for a stripe card
I don't have to disprove, you have to prove.