Brown to take a pounding during the summer 

mike

But Iain Martin in The Sunday "Telegraph points out one of the flaws in this theory:"
You expected something different from The Sunday Telegraph ?

Augustus

The Britons returning from their holidays abroad, grumbling about exchange rates, will be as nothing to the knock-on effect of consumer price inflation which the Bank of England will be able to do little to avert.

In the longer term, however, if Brown is able to halt the march of increased wage demands, which would in turn drive inflation even higher, although experience of Labour generally makes that unlikely, he would be able to claim a realistic victory. What he would not be able to do is prevent a continually weakened pound from pushing up import prices.

Chris

It's mainly down to Gordon's unique combination of arrogance and stupidity that we aren't in the euro. If we'd joined we could have avoided all this.

David Boycott

"we aren't in the euro. If we'd joined we could have avoided all this."

Yes, because - obviously - the Spanish and Irish economies have really benefited from Euro membership haven't they?

Silent Hunter

Chris:

Yes indeedy!
Can't argue with that. :O)

Cropstar

The summer will feel like a dream to Gordon, wait until the winter and with the sky high fuel prices they'll be millions unable to afford to heat their homes. Will Gordon rack up the national debt even more to bail them out?

DM

Inflation does not go away, even in a nice hot summer...and distrust is so high there is no way Gordon and team could do anything to make us think they know how to run the country.
People feel the pinch in their pockets. They know who to blame.

mitch

Well Ive just got back from Cyprus and everything is expensive now and the locals hate it.I can get 200cigs from my local pub cheaper than out there.Petrol is cheaper but that's just tax.

JONNY

I'm not that wild about Europe. But if we don't hoist the white flag and join the Euro pretty soon the Pound will be taken to the cleaners and crucified.
It's not like the dollar. It's really quite an insignficant currency. If you don't believe me just hang around and watch this space.

PJ

The best times for the economy are when the pound is relatively low (e.g. 1992-97). Our economy urgently needs rebalancing away from home consumption towards exports - witness our gigantic and persistent balance of payments deficit. So we should welcome the relatively weak pound, even though it makes imports and foreign holidays more expensive.

And if you're that desperate for cheap holidays, you can still go to the States or Africa or SE Asia.

John

The 'club med' countries are, and for the longest time have been, on divergent economic tracks with Northern Europe. It's just a question of time before the Euro explodes, just like every other 'EU' before it. Joining a 1-size-fits-all currency (or union) simply can't work in the end unless the countries disappear too. Sure the EU want that for the UK, but it's clear we as a Country have had enough of all that, just like it's finally obvious even to nuLab. that no more taxes can be extracted.

Augustus

PJ, normally I would agree with you if UK manufacturers were in a strong position, but they aren't. The sector's share of GDP has fallen from 19% to just 14% since 1995, so it would have to grow very fast to compensate for collapse elsewhere.

What has been driving our economic growth during the New Labour years has been the consumer boom, and it seems that the end of this has now finally come. There is also the fact that Britain plc has made itself dangerously reliant on Asia for cheap production in recent years, particularly Machinery, electronic products and textile materials. But now, with the cost of transporting goods from China to Britain soaring, UK firms are beginning to find that using it as their manufactoring base isn't as cost efficient as it was in the past. If you add to that commodity price rises and overall factory input prices, which are now rising at record levels, there are nasty implications all round for profits and for Gordon Brown's tax revenues, already in the process of being ravaged by shrinkage in the financial sector.

Trish

Read Guido on what the Euro is doing to the Irish economy. After reading it will make you thank God Brown stopped us from joining.

TGF UKIP

"Millions of Britons will be grumbling about the level of the pound." Quite so, but will they necessarily blame G. Brown? Certainly that political and economic heavyweight Boy George has not suggested they should nor even attempted to draw the faintest dotted line between our overborrowed and underperforming economy and the level of our currency. Nor has Dave and Fraser's Wonder Boy even deigned to mention the ever widening trade and balance of payments gap.

It makes you wonder how far the Tories could be ahead if they were as competent an Opposition as Labour is an incompetent Government.

kinglear

One of the really untold stories is the fall of the pound against what were old Communist countries. for the last 18 months I have been vsiiting Hungary and Romania. Overall, the GBP has dropped by 26% against the Hungarian Florint and by 16% against the Romanian Lei. And the Euro? About 28% drop. Great economic management, but then we do need a lower exchange rate to try to get the balance of payments to balance ( which it never will whilst the PSBR is on course for £100billion this year - and the rest)

Jennie

High inflation will erode the true value of the trillions of pounds of personal debt that people in the UK have racked up. So Gordon might pick up some grateful voters there!

Tandy

Why are the Tories not going harder on the economy. On Marr Cameron did not even mention Labour surrendering the mantle of economic competance by abandoning the golden rule. Also the public at large is not aware that the pound has fallen faster in the last few months than it did at the time of the ERM fiasco. Tories get your act together!

Rex Burr

Tandy
I made a similar comment last week.
Excluding the very recent food and fuel effects, the current state of the economy is a result of Brown’s ill-conceived strategy over the past eleven years.
Why does Cameron not make more of this disastrous situation?
Is it because, apart from a bit less tax, and a bit less spend, if the Tories win the next election the only alternative to a Labour credit boom is a Tory credit boom.
The world fundamentals will be no better than they were at the end of the nineties. Globalisation will still facilitate the export of jobs, earnings will still be falling and our balance of trade will still be deteriorating.
If Cameron is to pour scorn on brown's record he must have an alternative.

cuffleyburgers

Chris

You pillock.

That's the one thing he got right, and you can be sure it had more to do with spiting Blair, and his own personal hubris than any dispassionate analysis of the many good reasons for not being railroaded into it.

Silent Hunter

cuffleybuggers:

Yes!.....'cos we're all so much better off now with good old sterling aren't we.

I take it you haven't been abroad recently and tried to buy something?

But hey! You must be right.....let's do what we did with our gold reserves....
Let's wait until sterling is at rock bottom against the euro and then join.

Now I see how Labour maintain their 22% support in the polls LOL

DD

The Euro works for countries like the Benelux ones whose economies are all similar and whose workforces can cross nearby borders to take up jobs and be back home at the end of a shift.
Once you get outside the central zone, it's a different story.

Fergus Pickering

If we had joined the Euro we could have avoided what? You mean those clever euro chaps have beaten the credit crunch? I'm afraid, though I hate personal abuse that you, chris, and you, jonny, are indeed just the tiniest bit pillocky. What do you suppose would have happened to house prices if we had had the euro?