British industry can not cope with strong pound
Friday 31 January 1997
Or perhaps the complaints are another manifestation of the British disease afflicting exporters whose only idea about building and retaining markets is cheapness. First of all they take the impact of a strong pound on their export margins. Later, they lobby for lower interest rates so that a devaluation will bale them out. What a contrast to the attitudes of exporters in our big trading partners. For a decade and a half, French and German companies have had to bend to the discipline of a strong exchange rate. They have reacted in their usual way, by improving quality and service. Both countries have a trade surplus despite having currencies that trend upwards.
It is only since the autumn that the pound has risen. It has not yet regained the level, just under DM2.78, from which it plummeted out of the exchange rate mechanism in 1992. In inflation-adjusted terms it is well below its level five years ago. Any well-managed big company would have hedged its foreign currency exposure for about six months - that is, until the end of March. But only three months of an elevated exchange rate is enough to have dozens of industrialists posturing about the pain.
No doubt they are right, and British industry will not be able to cope. They will have to hope that the pound will soon revert to its normal trend - downwards.
- 1 Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 4 Right to die: Belgian doctors rule depressed 24-year-old woman has right to end her life
- 5 The biggest first date turnoff has been revealed
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Van driver who comforted Clark Carlisle and called 999 after suicide attempt dies age 24
Greece debt crisis explainer: A history of just how the country landed itself in such a mess
Greece debt crisis referendum: Greeks want to vote No to austerity – but Yes to Europe
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...