Jonathan Fryer

Writer, Lecturer, Broadcaster and Liberal Democrat Politician

Pound Euro Parity?

Posted by jonathanfryer on Saturday, 19th August, 2017

Pound Euro exchange rateIn the run-up to last year’s EU Referendum, many UKIP and Tory Brexiteers proudly wore pound signs (£) in their jackets, symbolising for them the strength of Britain standing alone. But I wonder how they are feeling now that the pound sterling has sunk so much in value? Airport currency exchanges in the UK this week have been offering just under one euro per pound and at ATMs on the Continent the exchange rate is not much better, So for UK travellers going to the Continent, things are about a quarter more expensive than they were in June 2016. People staying at home are being hit, too, as inflation caused by higher import prices is now exceeding wage rises. Of course, some exporters are benefitting from sterling’s fall, but for many of them that boon will be short-lived, as more expensive imported raw materials and components will mean that their costs will rise, and so must their prices. So the net effect of voting Leave last year has been that most people are worse off — and Brexit hasn’t even happened yet! Britain’s economy has meanwhile fallen from being the strongest-growing among OECD countries to the weakest. The Eurozone is doing better than it has for some time and the euro itself has risen against the US dollar, too. Naturally, as a Remainer I believe that the sensible thing now is for the government to admit that Brexit is going to be far worse than they imagined and therefore they will pull the plug on it, organising a referendum for permission to do that, if necessary. But I very much doubt that Theresa May, let alone her Brexit team, has the courage to do that. So the UK may indeed crash out of the EU in 2019. And I would not be surprised if some future UK government has to go knocking at the EU’s door, asking to be let back in, accepting the euro and all.

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