Today is World Mental Health Day. Will someone from among our leaders please wake up to the insanity abroad in our country?
Currency markets have spent the past week casting judgment on what Theresa May’s version of Brexit means for the economy. These markets don’t spin. They don’t buy campaign buses. Currency markets can’t be manipulated by politicians. They coldly price the prospects for an economy’s future health. Their verdict this week has been a damning one for supporters of Brexit.
The value of the pound has fallen by a fifth since last November. This is a twenty percent fall in value. Two thirds of this decline has occurred since the UK voted to leave the European Union. And we haven’t even begun to leave yet!
Against the US dollar the picture is bleaker still with the pound now trading at a 31-year low. Despite the grim picture painted by currency markets, this week’s economic data showed evidence of a short-term boost in demand, much touted and bragged about by supporters of Brexit.
The headlines from the London Stock Exchange were of an all-time high in the FTSE 100. The bad news is that this boost from currency depreciation will be temporary. It will wane early in 2017. Near-term momentum will be replaced by a cut in real incomes as inflation makes a spectacular return, spurred on by the weaker pound. Inflation significantly above the Bank of England’s 2 per cent target is expected by next summer. The cost of inputs, many of them priced in US dollars — already growing at an annual rate of 7.6 per cent — is set to accelerate further.
buy provigil modafinil An increase in inflation disproportionately hurts those on fixed and low incomes while eroding the real value of mortgage debt among those with housing assets. Recent increases in world oil and food prices add to the clouds gathering over household budgets.
Of course, low income households across the land voted Leave in their tens-of-thousands, perhaps lured by the bus-side suggestion that it would mean more money for us.
It won’t. And the people who voted for it will suffer the most.
The analysis in this post is beyond my meagre understanding of economics. I have adapted it from the Times [10/09/2016],in a piece by Nagai Simon French, chief economist at the stockbrokers Panmure Gordon.