Outlook: No sympathy
Wednesday 12 May 1999
Still, it would be easier to feel sympathy for plucky manufacturers struggling with the burden of a strong pound if they had shown themselves able to take advantage of the weak pound between September 1992 and mid-1996. In fact, manufacturing output grew by just 7 per cent in those four years, despite a surging economy.
Over the same period, the level of manufacturing productivity in the UK rose 6 per cent - only a third of the increase achieved by French and German manufacturers, who were then labouring under their own strong exchange rate. With that record, the claim by the ever-vocal manufacturing lobby that everything would be hunky-dory if only the Bank of England could bring the pound down has to be treated with scepticism. There is nothing in Britain's recent economic history to support the view that industry's problems would be solved by the panacea of depreciation. The behaviour of sterling in the past three years is a brief aberration in a long history of currency - and manufacturing - decline.
The Monetary Policy Committee signalled last week that if the pound does stay high it might cut interest rates again. The nine experts will certainly continue to come under pressure from business organisations and those unions staging a circus of protests on Threadneedle Street.
But if the high exchange rate does provide a rationale for lower interest rates, it is not because industry is still in the doldrums. Rather, the strong pound is a reflection of the strength of the rest of the British economy. The strength of the pound might yet allow borrowing costs to fall further, but that will be no thanks to manufacturing.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...