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The British took off the pound and ushered in its fastest depreciation in a century

wallpapers Tech 2020-10-30
In 1967, Harold Wilson, the then British Prime Minister, declared, "the pound in your pocket has not depreciated," according to a report by the company. However, the British people soon found that the cost of imports and the number of overseas holidays began to rise sharply, and their real quality of life fell sharply. If history can be used for reference, Boris Johnson, the leader of the "brexit" camp, has promised that "the subtotal results generated by brexit are" excessively exaggerated ", it will prove to be wrong. Historians, economists and foreign policy experts have pointed out that the decline of the pound by more than 10% since the June 23 referendum shows that Britain's global role and influence will show a downward trajectory. Rui Pedro Esteves, an associate professor of economics at Oxford University, points out that the history of the pound against the dollar in the past century has actually been on the downward ladder, and the pace is huge and lasting. As the world's oldest currency, the pound collapsed. During the first World War, one pound was convertible to nearly five dollars. On the day of the brexit referendum, the pound fell to $1.50 against the US dollar. At 4:33 p.m. on Monday, one pound is worth $1.333. Analysts at HSBC said the pound could fall to $1.20 against the dollar. Billionaire investor Soros said the pound would fall to $1.15 against the dollar, equivalent to the euro against the dollar. Barry Eichengreen, an economics professor at the University of California, Berkeley, points out that the size of a country's economy calculated from other countries' currencies - in the case of the UK, in dollars - is a measure of the country's international power and influence. While some economists, including former governor of the Bank of England king, believe that the weak pound will boost Britain's export competitiveness, other economists believe that the devaluation of the pound brings about the threat of recession and lower interest rates, leading to a shrinking appetite for UK assets. The pound has been on a steady downward trajectory, mainly due to a series of economic bumps. For most of the past century, the pound's dominance on the international stage has diminished. As early as 1931, the United Kingdom officially announced to abandon the gold standard, implemented gold export restrictions, and allowed the pound exchange rate to fluctuate with the market trend, thus the gold standard entered the depth of history. Meanwhile, the pound plunged for the first time. In 1944, the British pound joined the Bretton Woods monetary system and suffered a sharp fall again. Five years later, the pound fell 30% again. In 1967, during the collapse of the British balance of payments, the government allowed the pound to fall again. A few years later, although the international monetary organization was asked to help avoid the pound crisis, it depreciated again in the early 1980s. In 1992, Britain was kicked out of the European exchange rate mechanism, and the pound fell again. Now, many analysts suspect that brexit will cost the pound its status as an international reserve currency. According to data released by the International Monetary Fund, the pound now accounts for 5% of foreign exchange reserves. The depreciation of the pound may not be able to boost British economic growth. While a weak economy should boost manufacturing and tourism, three-quarters of the UK's economy relies on services such as finance, whose future denies access to the EU. Economic impact Simon Wren Lewis, Professor of economic policy at Oxford University, said any "short-term boost in competitiveness would be offset by other negative effects, such as reduced investment. Therefore, whether in the short term or in the long run, brexit will have a negative impact on the British economy. " In fact, the British economy may have felt the impact of what is going to happen. As early as 2008, the pound fell 26% to $1.46 against the US dollar, leading to the continued expansion of the UK current account. Many economists have warned that London's position as a global financial hub may be in danger because of "brexit". In addition, the weight of British discourse on the stage of the United Nations and other international policy forums may be weakened. (Tencent Finance)


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