The quiet rise of the pound

When the pound was declining a bit more after the Brexit vote we got daily commentaries from the media on this and how they thought  it was caused by the decision of UK voters. Most of the devaluation of the pound actually occurred between July 20165 and April 2016, long before the media thought we would leave the EU. There was a further leg down after June 23rd. Over the last month the pound has been rising against the dollar and the Euro. We rarely get news of this, and the rise is not attributed to the moves recently taken to press on with Brexit.

If someone believes Brexit was the crucial variable when it was falling, why do they change their view when it is rising? Why didn’t the pound fall this month, given the clear indication that the government does now  intend to send the Article 50 letter and has Parliamentary support to do so?

 

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59 Comments

  1. Bob
    Posted February 2, 2017 at 9:18 am | Permalink

    The Brussels Broadcastng Corporation have a duty to inform, educate & entertain.

    I would say that they are failing in all three, they constantly fail to break news stories that go against their globalist agenda.

    Mr Whittingdale failed miserably to reform the BBC after they dished the dirt about his girlfriend. I suspect that they would do the same to anyone who stands in their way, as Rupert Murdoch discovered to his cost.

    It would take a brave politician to call time on the BBC.

    #Leveson

    • Tad Davison
      Posted February 2, 2017 at 2:01 pm | Permalink

      Let those without sin cast the first stone.

      There must surely be somebody in the House of Commotions who is clean enough to call time on these lop-sided b****rds?

      Tad

    • getahead
      Posted February 2, 2017 at 8:27 pm | Permalink

      Nevertheless, it needs to be done. Someone must grasp the nettle.
      Theresa, once you have disposed of the EU, the BBC can be your next challenge. In fact, all you need to do is remove the BBC’s rip-off taxpayer funding.

  2. Bert Young
    Posted February 2, 2017 at 9:41 am | Permalink

    Re-asserting our identity will undoubtedly boost the £ . The role of the IMF in propping up the ECB was one of the hurdles we faced ; hopefully the new disciplines on the other side of the Atlantic will put currencies into a more realistic perspective .

  3. James neill
    Posted February 2, 2017 at 9:47 am | Permalink

    Whatever about the ups and downs of the pound we’ll know soon enough with the increasing drift of british retirees returning home from the european continent if they see they cannot afford to live in these countries any more- that’ll be the real test

    • a-tracy
      Posted February 2, 2017 at 12:03 pm | Permalink

      What’s the test?

      Would it be a problem is retirees drift home? The pensions we pay out of UK funds will then be spent back in the UK and we pay retirees healthcare costs in Spain and other EU countries anyway “The UK government pays Spain an annual sum per pensioner to cover their health costs”. https://www.theguardian.com/money/2008/apr/08/expat-finance-spain

    • Jagman84
      Posted February 2, 2017 at 12:50 pm | Permalink

      Maybe the ‘drift’ is due to the expectation that years of self-harming in the U.K. are finally ending?

    • Original Richard
      Posted February 2, 2017 at 4:39 pm | Permalink

      All the British retirees need to do to avoid being affected by the value of the pound is to put all their money and investments into the currency of their resident country, generally the Euro.

      The real reason why British retirees return to the UK eventually is to access our NHS.

    • Anonymous
      Posted February 2, 2017 at 5:59 pm | Permalink

      Could be that pensioners can see that things are going to get better in Britain and worse in the EU. They don’t want to be cut off.

    • Edward2
      Posted February 2, 2017 at 8:43 pm | Permalink

      Are you expecting forced deportation of UK citizens currently living in the EU?

  4. alan jutson
    Posted February 2, 2017 at 9:49 am | Permalink

    The pound goes up and down as do other currencies around the World, the fact that they do not go up and down all at the same time is due to many factors, some are related to what the home currency government does, some by what other Countries governments do, some by global demand or crisis.

    If we all guessed right, would would all be millionaires, the fact is those who speak loudest tend to be journalists, and many of those are not millionaires whose wealth has been gained with successful currency transactions.

    • Anonymous
      Posted February 2, 2017 at 4:04 pm | Permalink

      Dr Redwood’s comment was on the selective reporting of the pound’s fluctuations.

      The BBC’s deathwish for Brexit.

      • alan jutson
        Posted February 3, 2017 at 8:02 am | Permalink

        Anonymous

        I agree, that is why I said few journalists were currency millionaires, surely an indication that they are not experts at predicting the events, or cause and effect.
        Indeed many are so poor, they do not even appear to be experts at hindsight, so they simply guess, with no real facts.

        Unfortunately most news now tends to be opinion rather than factual reporting, amazing how poor real journalism is now.

  5. Lifelogic
    Posted February 2, 2017 at 10:32 am | Permalink

    When the pound is rising the BBC usually just switch their line to declining stock markets. So they get their propaganda in either way.

    Of course were May and Hammond real Conservatives and moved away from their silly, high tax, expensive energy, vanity project pushing, interventionist, red tape pushing, wage controlling, pension and landlord mugging, climate alarmism and artificially low interest rates (an essentially socialist agenda) then the pound would be much stronger still.

    If they changes the structure of the NHS, from free at the point of delay, incompetence and rationing (so it actually could work) it would help too.

    • getahead
      Posted February 2, 2017 at 8:34 pm | Permalink

      You’re on the bandwagon again Lifelogic. Nevertheless you are right.

  6. Kenneth
    Posted February 2, 2017 at 10:34 am | Permalink

    Much of the “mainstream media” is out of touch with reality with its bias by omission.

    Take immigration. The argument by many moderate people is that immigration is a good thing, but a high rate of immigration is a bad thing.

    Have a listen from 30 minutes here: http://www.bbc.co.uk/programmes/p04pmst8#play

    You will hear a BBC lecture against Mr Trump’s policies.

    At 38 minutes a caller to the programme tries to make the point that the high rate of immigration is damaging to communities. There follows another BBC lecture about the merits of immigration and the problems of deprivation.

    The BBC’s broadcasting licence should be reviewed as it may be irresponsible to allow these people to have broadcast equipment and access to powerful transmitters that push such one-sided political propaganda.

    • Know-dice
      Posted February 2, 2017 at 11:01 am | Permalink

      And on BBC Breakfast Tuesday morning –

      “Parliament is debating as to whether we will be leaving Europe”

      No, no, no – We are leaving the EU…

      • John C.
        Posted February 2, 2017 at 5:56 pm | Permalink

        They were actually debating, not whether we should leave the E.U. or not, but whether the popular vote should be ignored. Their own views on membership should be irrelevant, since that was not the subject of debate.
        Apparently a hundred odd DID believe that the vote should be ignored. Their names should be printed out and distributed to every household.

      • fedupsoutherner
        Posted February 2, 2017 at 7:18 pm | Permalink

        Know-dice

        We all hope we are.

    • Yes
      Posted February 2, 2017 at 2:25 pm | Permalink

      It is Fake News. The BBC does not check sources of information. It merely repeats the likes of CNN which has recently suffered the supreme criticism that its own Head of State and Government have barred it from attending any interview or statement in Official Head of State addresses.
      The BBC was also referred to sarcastically on international television services as “Another Beauty ” ie similar to CNN. The BBC historically is an embarrassment to our country

    • Anonymous
      Posted February 2, 2017 at 4:07 pm | Permalink

      And when the BBC radio channels aren’t doing that their presenters are telling us how much they’re looking forward to seeing Trainspotting 2 at the cinema that evening.

      I’d also like to know how much R2 pays those with the rights to Queen’s musical catalogue.

      The BBC advertises like MAD.

  7. John
    Posted February 2, 2017 at 10:48 am | Permalink

    Another MP with no grasp of basic economics.

    1. The US has a vastly larger number of $ in circulation.
    2. Electing Trump has caused much uncertainty.
    3. Because of it’s larger density, the US$ falls faster than the £.

    The same goes for the Euro with brexit replacing Trump.

    Sad these fools are the ones “running” the country and the sheep just follow along.

  8. Ian Wragg
    Posted February 2, 2017 at 10:48 am | Permalink

    I don’t understand all the noise about the exchange rate. For 20 years I worked in the Middle East and was paid in dollars

    Looking back at bank remittance slips I got between 1.07 to the pound and 1.72 over this period.
    3 years ago I got 1.07 € to the pound. Last week I got 1.18.
    It’s swings and roundabouts.
    Silly article on BBC this morning. Car salesman saying that he was selling more super cars due to the low pound.
    He showed a Masserati which was presumably bought in Euros so would be more expensive.

    • getahead
      Posted February 2, 2017 at 8:44 pm | Permalink

      I remember when we got nearly 1 pound to a dollar. Was this the time when the pound was in the exchange rate mechanism?
      Anyway it was good while it lasted.

  9. Mick
    Posted February 2, 2017 at 10:51 am | Permalink

    The pound as been going up for a while now, not that the BBC or Sky are going to give it air time, but when the the pound was going down they all reported it as armagadon or the earth had opened up and we were going to be swallowing up, but then what do you expect from the mouthpiece of the eu, about time the licence fee was scrapped, its not just that but anything positive about Brexit the BBC/ Sky will find something negative to broadcast you only have the listen the the left wing reporters and the snide way they talk, eu loving muppets the lot of them, that’s my rant for the day😤
    P.s great result yesterday Mr Redwood 😄😄

  10. Denis Cooper
    Posted February 2, 2017 at 10:51 am | Permalink

    There are exaggerations and misrepresentations on all sides. Journalists are happy to use them for headlines to draw in readers, that is their nature, but more worrying is when MPs uncritically adopt them rather than making sober assessments of the reality.

    For example, when an MP claims in his contribution to a debate that:

    “The financial services sector is vital for London’s success. It employs 2 million people and is our biggest tax generating sector – I do not need to go on.”

    Well, in fact he could have gone on and told House how many – or rather, how few – of those 2 million employees are in any way involved with the EU, beyond having to obey whatever laws passed by the EU may affect their work.

  11. Roy Grainger
    Posted February 2, 2017 at 11:18 am | Permalink

    Similarly the Remainers who were vocal on my behalf when my commercial property fund investments went down after the vote are now silent now they have mostly recovered to pre-vote levels.

  12. David
    Posted February 2, 2017 at 11:56 am | Permalink

    The £ is of course a lot lower than before we joined the EEC – doesn’t that the EEC/EU has been bad for us?

  13. Prigger
    Posted February 2, 2017 at 12:17 pm | Permalink

    Media performance is lumpy. Take yesterday’s BBC News LIVE coverage of Article 50. As MPs went to vote on an Amendment, the BBC stated it was the vote on the Bill proper, then immediately cut to something to do with Trump: their ongoing obsession.
    But Sky News gave an accurate report on the “divisions” of the vote. Later in their feature “Skypapers” they obsessed on Trump despite the Article 50 vote… showing footage of Trump and his daughter Ivanka boarding a helicopter travelling to pay respects to Chief Special Warfare Operator William “Ryan” Owens, a Navy Seal who was killed in recent anti-terrorist activity in Yemen. They detailed nothing of the raid nor the people injured and killed but giggled and smiled that Ivanka should be going and not Mrs Trump. This is our media.: incompetent and disrespectful. They are FakeNews and JokeNews.

  14. Tony Hart
    Posted February 2, 2017 at 12:39 pm | Permalink

    If the £ is rising, then inflation will fall. So, it would be a good time to match the BOE bank rate with the CPI inflation rate on a quarterly (3 mths) basis, automatically. As Ed Conway tweets, there is a risk of savings accounts falling. Also, we must stop ordinary people borrowing so much (£1 bn in December). If BOE bank rate matched inflation, then the retail giants might temper price increases because of the increased borrowing cost (I’m assuming most of them have debts).

  15. lojolondon
    Posted February 2, 2017 at 1:28 pm | Permalink

    Sorry, I meant to say : explaining how he lost a Billion dollars betting that Brexit would cause the Pound to collapse and also that the Trump presidency would cause the US Dollar to collapse.

  16. ian
    Posted February 2, 2017 at 1:42 pm | Permalink

    I just look at the pound and it going down, maybe later today it will be going up again, seems to go up and down like a whores drawers, seen funny that a country that is growing more than most should have such a cheap currency with talk of it getting even cheaper when the growth rate has been forecast to stay at 2%, maybe if you brought the growth rate down more the currency would go up.

  17. Tad Davison
    Posted February 2, 2017 at 1:54 pm | Permalink

    ‘If someone believes Brexit was the crucial variable when it was falling, why do they change their view when it is rising?’

    It’s called lop-sided journalism John, and we all know who the chief protagonists are. We want and demand a mechanism that is fit for purpose, that ensures such things cannot happen in future, especially when we are forced to pay for the claptrap, like it or not.

    It simply is not good enough that a so-called ‘trusted national broadcaster’ can push their own slanted pro-EU agenda. Mind you, to be fair, they’re not the only ones, but I don’t have to pay for the others via a compulsory licence fee.

    Tad Davison

    Cambridge

  18. Robster
    Posted February 2, 2017 at 2:02 pm | Permalink

    Do you think that it’s about time that the MPC put the base rate back up again to its “temporary” emergency level?

  19. Excalibur
    Posted February 2, 2017 at 2:13 pm | Permalink

    When is the government going to take action against the continuing Leftist bias of the BBC and Sky ? Since the democratic vote to leave the European Union, there has been an unrelenting diatribe of prejudice and fear mongering from both broadcasters.There is no attempt to balance the news. Commentators are apparently selected for their pro European preferences. Cannot something be done, JR, to balance political commentary ? It should not be the remit of either broadcaster to follow a duel political agenda i.e. rubbishing Trump and opposing Brexit.

    • getahead
      Posted February 2, 2017 at 9:32 pm | Permalink

      Excalibur, you don’t have to watch Sky, nor do you have to pay for it. The outrage is that the BBC uses taxpayers money to push its own left-wing liberal propaganda.

  20. Newmania
    Posted February 2, 2017 at 2:40 pm | Permalink

    The pound fell on each occasion Brexit became clearer or more likely. No-one but John Redwood denies it .The Brexit line is that Brexit only prompted a beneficial realignment which can only be answered …“ Stop making stuff up” .
    The 20% down grade to the UK is complete but the US has embarked on a protectionist experiment and it is becoming clear that the EU is also going to suffer from Brexit. Like the UK, the EU is set to place political above economic considerations and we are headed for an acrimonious divorce.
    The fact we will all be poorer is not a cause for celebration and the fact that we are the cause of the whole catastrophe is one of the reasons many of us no longer feel any pride in the country we live in.

    Reply This week leaving has become more certain yet the pound went up

    • Anonymous
      Posted February 2, 2017 at 6:45 pm | Permalink

      Newmania:

      A) We didn’t cause the catastrophe. EU overstretch without mandate did.

      B) I now feel immense pride in my country and the people who defied Project Fear.

      C) It is the EU which has insisted on Hard Brexit. Had it offered reasonable controls on immigration it would not now be facing total collapse.

      I predict you will blame everything on Britain. Including the rise of rival powers and the credit crunch crisis which was seeded in the Clinton reforms.

      • Denis Cooper
        Posted February 3, 2017 at 11:55 am | Permalink

        There is no catastrophe, and there are no good reasons to expect one.

    • fedupsoutherner
      Posted February 2, 2017 at 7:21 pm | Permalink

      Newmania

      You say…..The fact we will all be poorer is not a cause for celebration and the fact that we are the cause of the whole catastrophe is one of the reasons many of us no longer feel any pride in the country we live in.

      Well, maybe you don’t feel proud of our country but I and many others do. Perhaps if you feel so strongly about the UK you should consider moving to one of the EU nations. Don’t speak for all of us.

      • getahead
        Posted February 2, 2017 at 9:38 pm | Permalink

        Of course Newmania could be wrong. And I wonder how he could be proud of his country as a region of the EU.

    • Edward2
      Posted February 2, 2017 at 8:46 pm | Permalink

      Come on Jerry
      We know it’s you really.

    • Newmania
      Posted February 3, 2017 at 6:27 am | Permalink

      Refer wot I wrote but ok we`ll go with the astonishing coincidence theory – hardly matters anymore does it .

      • rose
        Posted February 3, 2017 at 5:45 pm | Permalink

        How do you feel about the EU being protectionist?

  21. Beecee
    Posted February 2, 2017 at 2:52 pm | Permalink

    The BBC does not report the news!

    It gives an interpretation of the news which it selects so that the Viewer can fully understand the opinion which the BBC wishes to advance.

    • fedupsoutherner
      Posted February 2, 2017 at 7:21 pm | Permalink

      Beecee

      That sums it up perfectly. Well done.

  22. Mick
    Posted February 2, 2017 at 3:21 pm | Permalink

    What planet are the lib/?? On, both the Libs in the commons and the lords saying there should be a second referendum on the end deal,
    I didn’t hear them calling for another election for the people when they went into coalition with the torys in 2010, because I didn’t vote for a coalition government , what a bunch of hypocrites

  23. agricola
    Posted February 2, 2017 at 3:32 pm | Permalink

    From a low of Eu 1.13 on the 15th January it is now at Eu 1.16, almost inaudible. I would not write any more into this than the exchange rate dealers trying to make a profit. When the UK economy thrives further after Brexit, and I have every faith it will, plus the EU stagnating further, we may see an exchange rate that enhances my pension and spending power. Whatever happens, having just spent an enjoyable three weeks in the UK, the quality of life here in Spain wins every time. It remains for the politicians to get Brexit right, but I am not holding my breath.

    • Richard Hobbs
      Posted February 2, 2017 at 8:37 pm | Permalink

      Here in Canada we are really suffering with the current low exchange rates, made worse by our State pensions having been frozen for years. We are all in favour of Brexit and can only wish that something can finally get done about the State Pensions soon and that the exchange rate of the Pound viz a viz the Canadian $ goes up to more realistic levels. If not we will be joining the number of older people returning home and adding to the costs on NHS.

  24. BadlyBehavedBritish!
    Posted February 2, 2017 at 4:11 pm | Permalink

    The BBC interviewed an expert economist today and asked why Mr Carney has got the consequences of Brexit wrong. She replied British consumers CAUSED it.

    It seems the British consumed normally.

    We should all alter our economic and social behaviour so enabling experts to get their sums marked with a tick

    • Anonymous
      Posted February 2, 2017 at 6:47 pm | Permalink

      “Where is the Brexit effect ???” BBC news this evening.

      Obviously not coming fast enough for them.

    • libertarian
      Posted February 2, 2017 at 7:31 pm | Permalink

      You know when people say never trust experts then some smartarse says oh so you wouldn’t want a Neurosurgeon to do an operation on you then.

      Why dont we do what they suggest ?

      Instead of asking economists, i.e. people that have never actually done any business or trade and are either civil servants, academics or bureaucrats why dont we have people from manufacturing, service industries, and retail come an tell us how things are going IN REALITY and the direction of travel they see. Rather the casters of horoscopes, chicken entrails and voodoo statistics

      • Denis Cooper
        Posted February 3, 2017 at 11:50 am | Permalink

        But the performance of a neurosurgeon is carefully monitored, at least in the NHS, and if his practical results are consistently poor then action is taken to prevent him operating. The same is not true for economists.

        • libertarian
          Posted February 3, 2017 at 6:16 pm | Permalink

          Denis

          Exactly

          Because the surgeon is a practitioner NOT a theorist

  25. Richard Butler
    Posted February 2, 2017 at 4:14 pm | Permalink

    A number of high profile Brits are quietly challenging ‘liberal’ fake / partial news, if anyone is interested. Especially important given the BBC this week made much of a new fake news committee that looked to be staffed by classic ‘liberal’ SJW’s;

    The most influential of these is Milo – he is THE Trojan horse of the right, winning over swathes of ‘liberals’ to the right. He is touring American Universities confounding the ‘liberal’ student audiences, many of whom convert there and then. Find him on Youtube.

    It is most important all of us on the right understand the critical difference someone like Milo can make as he looks, sounds and dresses like a progressive.

  26. DaveK
    Posted February 2, 2017 at 5:28 pm | Permalink

    They even prevent distinguished guests finishing their points too 😉 Mr Neil does seem to be one of the fairest presenters on there though.

  27. old salt
    Posted February 2, 2017 at 10:50 pm | Permalink

    With respect John my chart shows the turn of the pound to the dollar during July 2014.

    • Denis Cooper
      Posted February 3, 2017 at 11:44 am | Permalink

      Yes, but the turn of the sterling trade weighted index was later.

      There are three charts on page 23 of the January 13th House of Commons Library Research Briefing on “Economic Indicators” linked here:

      http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7865

      The pound peaked against the dollar in the summer of 2014, as you say, but it continued to rise against the euro for another year or so, and the sterling trade weighted index peaked about a year later.

      Either way the downwards trend started long before the EU referendum.

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