He also assumes that devaluation would push up the cost of imports. Would it not, in fact, by denying a soft market to foreign competitors, reduce our imports of manufactured goods? Had Sir Fred still been active in the industrial society in which he once played such a distinguished role, he might well have put more trust in the ability of manufacturers, given low interest and exchange rates, to out-perform foreign competitors at home and abroad.
Confidence in the currency is certainly vital. It is not difficult to achieve if the policy is seen to be to keep it low. It is very difficult to achieve, as we found out so often during the post-war years, to create confidence in a high pound, it is in fact only high pounds that are weak pounds.
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