exchange rates pre and post UK election

[PhilB]

Is there and consensus on what will happen to exchange rates post election. I was reading that if GB gets elected the pound is expected to strengthen. A hung parliament and it could weaken? Does any one have any views?

thanks

Phil

[Spinkler]

If Labour get any power at all after the election the pound will become the British Peso.

On a more serious note no matter who gets in the pound will not make a decent recovery,the economy is in a state which is holding the GBP to such lows.

The Greek bailbout news moved the euro slightly but the whole region over in europe is still a big mess.
I wouldnt be looking for a recovery in any of the currency over there for a long time.

[Fletchaman]

It has just come out today that the UK deficit is worse than that of greece, so don't see any change in the rate for a very long time.

as splinker said it could basically take a nose dive if we don't sort the deficit out damn quick.

I can see major tax increases coming whoever gets in on fuel, ciggies and alcohol

[Duncan74]

It has just come out today that the UK deficit is worse than that of greece, so don't see any change in the rate for a very long time.

Errr, the point is that it's all in the context of the overall economy. My personal debt is many many times higher than say a person on minimum wages. But if they've loans of a quarter of mine, then they would be in a much much worse financial position, as I could cut out ufrivolous expenses and pay off all mine in a few months. They would take a decade to repay.

The greek comparison is as false as saying it's record high borrowing in the uk at the moment (which is true), but then every government since the war has had a record high due to inflation. It's all about %age of GDP and the ability of the country to grow that GDP.

[Fletchaman]

Errr, the point is that it's all in the context of the overall economy. My personal debt is many many times higher than say a person on minimum wages. But if they've loans of a quarter of mine, then they would be in a much much worse financial position, as I could cut out ufrivolous expenses and pay off all mine in a few months. They would take a decade to repay.

The greek comparison is as false as saying it's record high borrowing in the uk at the moment (which is true), but then every government since the war has had a record high due to inflation. It's all about %age of GDP and the ability of the country to grow that GDP.

well so far according to Index Mundi greece GDP real growth rate is -2.5%
UK GDP real growth rate -4.3%

Now that looks bad to me being a normal man on the street

[Duncan74]

Ok, how about this.
http://www.google.com/publicdata?ds=...ountry:GRC:GBR

And from BBC news website today:-
"Greece is currently struggling with debts equivalent to more than 100% of its GDP. "

And from the ONS at the end of March 2010 then the UK debt was 62% of GDP.

So you can equally say the UK debt is worse than Greece's, or it's about half.

Also have a look at http://www.ukpublicspending.co.uk/do...lor=c&title=UK National Debt As Percent Of GDP

Yes we need to do something about it, but reporters can make any story out of figures that are so large that none of really can appreciate them. Also, note http://budget.treasury.gov.uk/images..._pie_chart.jpg

So if all the main parties are keeping education, health, defence and welfare (pension etc) payments at least the same in real terms, then to make the famed £1 out of every £100 on the overall budget, this means a 50% cut on everything else. So transport, halved. Housing and environmental issues halved.

More context on debt vs gdp although 2009 official figures. http://en.wikipedia.org/wiki/List_of...by_public_debt

[Fletchaman]

Ok, how about this.
http://www.google.com/publicdata?ds=...ountry:GRC:GBR

And from BBC news website today:-
"Greece is currently struggling with debts equivalent to more than 100% of its GDP. "

And from the ONS at the end of March 2010 then the UK debt was 62% of GDP.

So you can equally say the UK debt is worse than Greece's, or it's about half.

Also have a look at http://www.ukpublicspending.co.uk/do...lor=c&title=UK National Debt As Percent Of GDP

Yes we need to do something about it, but reporters can make any story out of figures that are so large that none of really can appreciate them. Also, note http://budget.treasury.gov.uk/images..._pie_chart.jpg

So if all the main parties are keeping education, health, defence and welfare (pension etc) payments at least the same in real terms, then to make the famed £1 out of every £100 on the overall budget, this means a 50% cut on everything else. So transport, halved. Housing and environmental issues halved.

More context on debt vs gdp although 2009 official figures. http://en.wikipedia.org/wiki/List_of...by_public_debt

But does the massive difference in GDP make a different for instance GDP in greece is around $365 billion but uk is $2.165 trillion???

[norma]

Is there and consensus on what will happen to exchange rates post election. I was reading that if GB gets elected the pound is expected to strengthen. A hung parliament and it could weaken? Does any one have any views?

A quote from Moneycorp's weekly update on the GBP/NZD exchange rate:

In less than a fortnight the pound has fallen from $2.17 to $2.09; by 3.6%. The achievement of new long-term lows is not the best of omens.

The rest of the update can be seen here:

http://kappa.ecommzone.com/lz/TTTCUR...76951/home.htm

[Duncan74]

But does the massive difference in GDP make a different for instance GDP in greece is around $365 billion but uk is $2.165 trillion???

That's exactly the point I was making.

If my income is £100,000 a year, a £20,000 bank loan with repayments of £400 a month is no issue at all. If however my income is £11,000 a loan of £10,000 with repayments of £200 is an issue. And this is compounded by the risk being higher, so the 'greek' debt repayments would actually be at £300 for their £10,000 loan anyway.

And that's why the news you referred to about the national debt in comparison to Greece's is just a bit too pointless (as int he news announcing it, not you re-posting). Of greater interest is that we are all in ;knicker twisting territory' as is the official term, as our debt is approaching 65-70% GDP. Note thaat the french national debt is at this level long term, it just happens that the UK long term trend is to be 50% or below. Also the debt to GDP is a combination statistic. Not only has debt risen, but GDP has dropped as we are in recession. So even without reducing the debt by a penny then the debt to GDP %age that is a better indicator of what's happening will reduce.

Doesn't matter who gets in then until the pension issue for 2020 and beyond is sorted there's going to be issues, and that's as a result of demographics not really policy of any party over the last 50 years.

Cameron on Sunday was interviewed and accepted that of all their proposals for money saving announced to date then they were only 18% of the total needed to meet their stated target to balance the books. The rest one assumes comes from simply the GDP increasing and getting more income/ coproporation tax/ VAT as a result of that. The Lib Dems £100bn for trident is actually £4bn a year. So in terms of total budget less than 1%. And Labour who are now basically equal to teh tories in all but name, are 'investing in the recovery' as they know that the salvation is still through the recovery of the GDP.

[slider]

Meanwhile, the exchange rate continues to drop - 2.079 NZD this morning
Will be interesting to see what happens post election - if we end up with a hiung parliament this is surely going to drop below $2