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 BBC election debate: The one photo that summed up the whole 90-minute leaders debate
- 2 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 3 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
- 4 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
- 5 Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
General Election 2015: David Cameron catching up in polls – but he badly needs a clear lead
South Africa xenophobic attacks: Shops looted and violence on streets of Johannesburg as foreigners are forced to hide in police stations
Earthworms rain down from skies over Norway, puzzling scientists
18th century sex toy found in 'toilet of sword fighting school' in Poland
'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
General Election 2015: Polish prince challenges Nigel Farage to a duel over immigration question
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...