Taking a pounding

How much should we worry about a falling pound? Since Monday sterling is off 5 percent against the Euro, 6.5 percent against the dollar, 9 percent against the Yen and 3.4 percent against the Hungarian forint: Hungary, of course, had to be bailed out by the IMF. This is worrying for the government as its survival plan for the next five years involves borrowing untold billions from the Arabs, Chinese or whoever has cash – who may not relish the thought of pumping billions into IOU notes in our rapidly devaluing currency. Of course it’s true that a weaker currency is good for the economy overall, as will help exports. It’s a reminder how lucky we are not to be in the Euro. But talk about a manufacturing-led recovery next year is dangerously optimistic. Here’s three reasons why.

1) We don’t have much of a manufacturing base left. While the City was allowed to boom in a light-touch regulation, manufacturers have been hit by a torrent of ‘elf-n-safety legislation.