EU-Digest/Guadian Unlimited: UK's Embrace of US Economic Policies has been Disastrous - Weak sterling symptom and support for UK economy

For the complete report from the Guardian click on this link

Weak sterling symptom and support for UK economy

UK's Embrace of US Economic Policies has Been Disastrous - Weak sterling symptom and support for UK economy

A reversal of fortunes for the pound in recent weeks has seen it fall sharply to record lows versus the euro. Indeed the UK economy faces many of the same problems that saw the dollar slide in 2007, leading analysts think that there is plenty more room for the pound to fall. "With a trade deficit per head larger than that of the U.S., the UK economy needs a sharp sell-off in the pound to bring the economy back to equilibrium," said Simon Derrick head of currency research at Bank of New York Mellon. It will certainly make the UK a more attractive place to invest.

Note EU-Digest: Simon Derrick head of currency research at the Bank of New York Mellon is professing "Voodoo economics". When a country devalues its currency their cost for the products and services they buy from overseas markets go up and usually cause inflation. Since most of the products the UK uses are purchased abroad a devaluation of the pound can only cause more hardship. The British who have copied just about everything from their Anglophone US friends across the Atlantic, including their spending habits and buying on credit, instead of listening to the sound advice of the ECB to keep their "books" in balance and inflation down, are now "reaping as they have sown". Instead of the British not wanting to be in the EU they might be the ones that are not wanted in the EU?