The record crash in the value of sterling is greeted with consternation by importers and retailers who import a high volume of the goods they sell. It is also tricky for supermarkets who import so much of our food and eventually all this will feed through in a rising cost of living.
But for manufacturers and exporters, this is the best possible news, reflected in record rises of production reported by the sector. The famous march of the makers which never happened might just be starting. It has been this blog’s stated view for years that sterling is historically overvalued and prevents reshaping of the economy away from debt financed consumption, underpinned by house price inflation, delivering low productivity and higher social inequality.
For new wealth to be distributed evenly through every level of society and in both the public and private sectors, it has to be created. You can make it, build it or pump it from the ground. And because GB has both the second highest overseas debt mountain and the second highest trade deficit in the world it sure needs to create a lot of new wealth. It must make more of what it consumes and export more overseas. Simply put; import less and export more. More skilled jobs with a future, fewer zero hours contracts surviving day to day.
For that to happen sterling trading in a band form $.95 to $1.25 is a must. It is also an economic revolution and it may have started. Brexit without tears will depend on it.