AN OUTSIDE VIEW

I have drawn attention several times to the falling value of the Pound against the Euro, which was worth about €1.50 when the Euro was instituted in 2002, €1.40 last summer and has now slid to €1.27, a drop of over15% in less than a year. At last the issue is being noticed. There was talk on the radio this morning of allowing it to fall to 1 pound to the Euro, a devaluation of one third since 2002. In any case it should not be forgotten that the Euro has been subject to inflation of around 15% over the same period. This recent fall in the value of the £ against the € will quickly show up in higher prices in the shops, though it is good news for British producers and manufacturers, and exporters in particular. Personally, I suspect that the Euro will itself drop before long, which will lead to a flight of investors into gold and commodities. It is a pity that Gordon Brown sold half the UK's gold reserves when the metal was at its rock bottom price, as they could have been sold now...