Sterling Devaluation

This topic contains 3 replies, has 3 voices, and was last updated by  angie 6 years, 1 month ago.

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  • #57542


    There is Telegraph talk that the new BOE Governor will devalue Sterling by up to 15% but aimed mainly against the US and Canadian Dollar. It’s thought that the Euro will fall anyway. I assume inflation will be back if this happens 🙄

    I’m unsure what impact this would have generally, but as I read it, it will make it harder or more expensive for Brits to buy overseas property anywhere, for pensioners living abroad more of a struggle, and holidays more expensive abroad.

    On the other hand, sellers of property abroad might find this ok if they need to convert back to Sterling.

    It could just be talk at this stage, but Carney has few other options following King’s miserable reign as Governor. Others are already saying that the Eurozone and other countries would do the same if he devalues Sterling, another right old mess waiting in the wings 🙄 ‘oh what a tangled web they weave’ 🙄

  • #117193


    Absolutely right Angie. Currency devaluation arises out of failure and the behaviour is like a drug addict having a fix -a temporary fix that makes fundamentals no better and with higher raw material costs worse permanently. The internal devaluation being done in Spain is painful but this is the big bonus for being in euro -they are getting more competitive again. Trichet had it right. The only real cure for prodigious inflation is price deflation -if you can stick with it you will get back into the daylight.but not with people commiting suicide because they are hungry or have nowhere to live for no fault of their own.Inflation is a worry ahead for those on fixed incomes -pensions that are not uprated.If you are young with a skill in high demand its no problem. Well you have to skimp -be economical with spending -shop around and invest carefully in good equities that are likely to stay around and pay you dividends in the currency you need in the countries you live in – a little physical gold as cheap as you can get when its going down maybe.

  • #117211


    You would have thought the markets had already priced in any devaluation. But it is a time for adventurous investors (perhaps foolhardy ones) ? Buy something in Spain or France, and if the pound devalues 15% you have already made money theoretically – but of course if you are paying stamp duty, and you can’t sell in future…

  • #117220


    I think the article is basically saying that it reckons Carney will devalue sterling against the US and Canadian $ by 15% so maybe buy dollars, which we once did and made a very good profit, the trouble with these articles is that they really don’t know what Carney is going to do yet, by which time it might be totally wrong or another World event causes a change of plan.

    I was talking with a senior bank executive earlier today about interest rates, and now savers are moving money into far more risky areas including property, shares (already risen a lot) and other forms, those who bought gold at $1800 per oz could already be nursing a loss of $500 per oz. Many UK savers are now buying property there to rent out for better returns but will another bubble form, yes says the chap I spoke to, but not for a few years, we shall see 🙄

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