The pound will recover. its a short term issue that was predicted by many (intact I made killing out of it!) but in real terms _nothing_ has changed. Trade between UK and other countries hasn't changed, actually, its increased with significant investment come into the UK since the brexit vote. (and btw I wanted the UK to stay in the EU) Also don't forget that the Euro is artificially high owing to managing the greek (And others) crisis which is far from resolved. The UK economy is higher than it should be because of the payouts on PPI which kept the UK in a good place but thats coming to an end. The big issue for the UK is interest rates which need to move upwards otherwise we will be in real trouble.
With regards JJP, the difference in machine size does nothing to the difference in the labour required, materials is only half, probably even less, of what drives the prices of these machines.
I predict JJP will sell everyone of their machines; I predict the next Stern releases will be inline with the current pricing for Ghostbusters with perhaps a small bump to cover inflation (with prices recovering in the UK as the pound strengthens). I predict those that are making machines for less will either make crap machines or go out of business.
Regards,
Neil.
What investment would that be? There's expected to be a very precipitous fall off in net investment EOY figures. It will get far worse in '17. Do you mean more tourists? You do realise that if inward investment were rising, Sterling's losses would not have been nearly so severe. This isn't just speculative bets.
The Euro is in no way riding high. It's weak. Very weak. Just that the £ is far weaker, at least for now. That will change if the referendum in Italy is lost, but both will be dragged still lower against a wider basket of currencies if tthat happens.
PPI settlements keeping the UK economy in a good place / overinflating it? The headline figures may be large, but they're spread over years and of relatively little consequence. Stuff like the QE undertaken by the BoE and interest rate cuts absolutely dwarf anything like this in size, consequences and inflationary effect. It's probably of more significance that it continues to further erode the sustainability of Lloyds very poor capitalisation.
I can agree with you that interest rates are a massive problem. Even if our exit is 'soft' which looks increasingly unlikely, a combination of a tough decade looming combined with people borrowing as fast and as much as they possibly can, with the housing market inflating as a result, and CPI inflation soon running away due to the fatal weakness of Sterling ... people will be getting much poorer in real terms. Unfortunately I don't think the BoE will act until it's too late ... some members of the mpc committee still want to lower rates, and this as we head for parity with the $ ....
There will be no rebound in Sterling in the medium to long term unless we either remain in the EU or get such a soft deal that we might as well be. It's a question of when not if the Euro next lurches into crisis, so that rate will rebalance, but as people in this country constantly forget, weakness on our doorstep only weakens us relative to the rest of the world.
Personally I hope rates go up in the US ASAP so no-one can ignore the weakness of Sterling any longer, and May stops kowtowing to the lunatic fringe of her party, and cries and begs to Brussels for retention of both single market access and freedom of movement.
If rates remain the same in the US for another 4-5 months, Sterling might keep its head above $1.15, making the government suing for a hard exit much more likely, and long term prospects much worse.
