The Pound is going down the Toilet

[rainbow]

Glug-glug.

Perhaps it should be rather known as the English half-pint?

[DaveDodo007]

Yay, we might remember how to make stuff again rather than importing it. The one country to start the industrial revolution and forget it completely, so lets Make Britain Great Again.

[Animavore]

You've been importing stuff from well before the industrial revolution. Well, plundering and stealing it. Let's not go back to those days, please.

[Rum]

I voted remain. Bustards!!

[JimC]

We'll send over a heap of young Aussie tourists when the pound gets ridiculously low. They'll single handedly save your economy!

(sure, there will be more drunken pub brawls, but you can't make an omelette without breaking eggs)

[Rum]

I suspect we will do rather well in the slightly longer term assuming no major international economic 'shocks'.

(If anyone asks I didn't say that OK?)

[Brian Peacock]

Data released on Monday (1 August) showed Britain's manufacturing sector suffered the biggest slowdown in over three years in July, while surveys published last week highlighted the service sector experienced the sharpest contraction since 2009.

Following the manufacturing figures, the pound was 0.40% lower against the dollar and fell 0.23% against the euro, exchanging hands at $1.3176 and €1.1811 respectively.

...more...

[JimC]

Less than half a % fall is not exactly going down the toilet...

[laklak]

We've got UK visitors in both September and October, they'll be hating it. Luckily they already bought their tickets in anticipation of a continued fall. One visitor is from London, so it will still be cheap as chips for her here, she'll be sucking down pints at 2 quid each.

[rainbow]

Yay, we might remember how to make stuff again rather than importing it. The one country to start the industrial revolution and forget it completely, so lets Make Britain Great Again.

You can't even make your own dildos, and your beer tastes like dishwater.

[rainbow]

Less than half a % fall is not exactly going down the toilet...

It does add up. The problem being is that the UK has lost its industrial base and has to import very basic stuff, that is now going to be more expensive. That will put pressure on increasing wages, and then inflation.
With investments based on a decreasing currency and giving low yield, there will be capital flight, and the pound will come under more pressure.

[Brian Peacock]

Indeed. It acts as negative multiplier, and fears about the UK economy contracting into recession in the next year is why the Bank Of England is expected to deliver an interest rate cut tomorrow.

Daily Telegraph: Business Live http://www.telegraph.co.uk/business/201 ... es-higher/

There is a lot of nervousness about whether the BOE’s Quarterly Inflation Report will indicate that a technical recession is now very likely. An interest rate cut on Thursday is almost old news as most people expect it so the question is whether the BOE will re-start Quantitative Easing to ward off a recession

If the Governor Mark Carney refrains from launching QE so early, then we think it’s probable to see the GBP/USD exchange rate rebound further in the short-term to as high as $1.3500 in reaction to a less dovish-than-expected BOE.

Another day, another indicator of UK economic performance falls to a 7 year low. The 4.6 point fall in the strength of UK economy between June and July is the largest decline in the near 20 year length of the survey and backs up the belief that the most important sector within the UK economy took a substantive body blow in the weeks post-Brexit. That is not to suggest that this will continue. Uncertainty in these numbers are high and one cannot legitimately predict a recession off one month’s numbers; one swallow doesn’t make a summer and nor does one frost make a winter but a continuation of this trend will see Q3 GDP fall into negative territory.

[Rum]

Bastard exiteeres. Sadly 'I told you so' won't make any difference whatsoever.

http://www.bbc.co.uk/news/business-36962059

The UK economy is contracting at its fastest rate since the financial crisis, making an interest rate cut "a foregone conclusion", according to financial data company Markit.

The Markit/CIPS purchasing managers' index that showed activity in the UK's dominant services sector saw its sharpest fall in seven years.

It follows falls in both construction and manufacturing in July.

The index fell from 52.3 in June to 47.4 in July, indicating contraction.

The figure confirmed an earlier initial estimate of service sector output.

Taken together with the manufacturing and construction data, Markit said a cut in interest rates by the Bank of England - expected following Thursday's meeting of the Monetary Policy Committee - was a foregone conclusion.

Policymakers are widely expected to reduce rates from the current 0.5% to a new low of 0.25%.

Earlier, economic think-tank the National Institute of Economic and Social Research (NIESR) said the country would go through a "marked economic slowdown" this year and next.

But it stopped short of forecasting a recession, saying the chances of the UK economy suffering a downturn in the next 18 months were 50/50.

It says inflation will also pick up, rising to 3% by the end of next year.

Analysis: Kamal Ahmed, BBC economics editor:

For those hunting for poor economic data since the referendum result, today's purchasing managers' index for the crucial services sector certainly provides significant pickings.

And it builds on pretty poor figures from the construction and manufacturing sectors.

It is now clear from the data that has been published that economic activity slowed markedly in the weeks following the referendum.

Of course, part of that is down to uncertainty about the shape of the economy as the UK negotiates its way out of the European Union.

Markit said incoming new business volumes fell for the first time since the end of 2012.

The pace of contraction was comparatively sharper than that seen for total business activity, and the fastest since March 2009, it added.

Moreover, companies widely reported the outcome of the EU referendum had weighed on new business inflows during the month.

Chris Williamson, Markit's chief economist, said the service sector data taken together with the construction and manufacturing data pointed to the UK economy shrinking by 0.4% in three months to September, a fall not seen since early 2009, when the Bank last cut interest rates.

"The unprecedented month-on-month drop in the all-sector index has undoubtedly increased the chances of the UK sliding into at least a mild recession," he said.

Markit said it was too early to know if the PMIs would stay as weak as they are now, but it said confidence about the year ahead was at its lowest since February 2009 among firms in the services sector, which accounts for nearly 80% of UK economic output.

"A quarter-point cut in interest rates therefore seems to be a foregone conclusion, " Mr Williamson added, "though the extent and nature of other non-standard stimulus measures remains a far greater source of uncertainty."

[JimC]

Maybe the government will use these figures to ignore the referendum result and refuse to leave, claiming "the national interest" as their compelling reason...

[Scot Dutchy]

Brexit has been kicked into the very long grass and nobody can be bothered to go and find it. Art 50 will never be triggered. Everybody with at least two brain cells knows Brexit was based on lies and misrepresentations. May wants it to die without trace and is just going through the motions.