Sterling and the Oxford Street view

'THE ERM? Umm. It's a rock group, isn't it?' ventured Judy, 29, leaning against the bar in a salsa club just off Oxford Street. 'No, that's REM]' blurted Maia, her cocktail-sipping friend, unable to restrain herself. 'The ERM is theee . . . Economic something-or-other . . . the . . . European Extra Mechanism] That's it] Oh, I don't know. I'm just regurgitating what I read. I can't really grasp what's going on.'

The front pages, news pages, editorial pages and even letters pages have been dominated for days by the reporting, dissection and analysis of The Sterling Crisis. But how much has the man and woman on the high street grasped? Can you explain why sterling is in a crisis? Do you know what happens when the pound sinks through the floor of the ERM? Do you know what it means when the pound is devalued?

In a random survey last week, Oxford Street traders and visitors were asked some basic questions. 'Easy' factual questions proved elusive; but sublime resourcefulness emerged on the more puzzling issues. More than half of those interviewed could not say what ERM - Exchange Rate Mechanism - means. Yet many came up with refreshing explanations of the pound's fate.

Bill, 60, a self-employed french polisher, had read all about it. 'The ERM stands for European . . . Monetary . . . ummm . . . I did know, hang on . . . nope. It's gone. Anyway, it's something that's supposed to make everything all right, but hasn't done, has it? When the pound drops through the floor of the ERM, well, that's easy. That's when the shit hits the fan, interest rates go up, the pound goes out and down, and I go down and out.'

Bryan, 35, a tattooed disco manager, took a more streetwise approach: 'Yeah. It means we get frozen out. Stiffed. We become untouchable, no one wants us, like spoiled goods. We just plummet. Yeahhh. Is that right? Do I get a packet of jelly babies?'

So much for the ERM. What about Maastricht and today's referendum in France? Nearly three in four of those approached knew what the French would be voting on, but only one in three could explain - in rudimentary terms - what the Maastricht treaty was actually about.

'No idea really,' confessed James Buckingham, 21, a barman. 'Just heads of state who got together to have a treaty. I haven't really looked into it.'

Violet Oswald, a pensioner, puckered her lips, pondered and commented: 'I should think that 99 per cent of the people in this country know virtually nothing about it. I'm not sure whether it's lack of interest or that we haven't been told.'

The more vexing question, as to why sterling is in a crisis, yields a predictable clutch of xenophobic ('It's the bloody Germans]') responses. Others focused on the part played by speculators and the Government, while some, including Bill the french polisher, claimed to be genuinely mystified. 'If I knew the answer,' he said, 'I'd tell Lamont and Major to get their arses out the way and let me do their job. It's a complete enigma to me.'

It took Len, a retired engineer who was out 'shopping for music', to come up with some high-street horse-sense. 'It's obvious. The goods on sale in this street - the records, the hi-fis, the clothing - are much more expensive than in America or Europe. That tells me one thing - the pound is overvalued. It's been staring us in the face for so long, it makes you wonder how the experts could get it so wrong.'

On to the next question: What does it mean if the pound is devalued?

'I've never been through a devaluation before,' said Ashley Andrew, 26, a flower- seller, 'so I don't know what it's like. But I do know that for these imported roses - selling at pounds 2 a bunch - devaluation means that next week they could cost me pounds 3, pounds 4 or even pounds 5, and that means I've gotta sell them at pounds 8. No one's gonna pay pounds 8 for my roses, so that means I'm out of business. That's devaluation.'

Rupert, a bouncer, broke off from his nail-picking and became philosophic: 'Yeah, the pound's not worth a carrot, is it? So the question is meaningless. Yeah, I like that, meaningless . . .'

Finally, Paul Williams, a 20-year-old student, shopping for a football, said: 'Personally, I believe in God. God controls the money supply. So I'm not really bothered.'