The race to the bottom continues with first place oscillating between the main players, the Euro, the Yen, the US Dollar, etc. As the chart above shows the British pound has taken a dramatic plunge this year.
It may not be all bad news though as this snippet from The Telegraph points out:
Beggars can’t be choosers, and George Osborne – under attack on virtually all sides – must gladly seize on whatever support he can find.
Yet even for Britain’s beleaguered Chancellor, to be blessed by Olli Rehn, European Economic and Monetary Affairs Commissioner, must feel a bit like the kiss of death.
A mild mannered and basically decent Finn who has never looked comfortable in his role as Europe’s economic slave driver in chief, Mr Rehn is admittedly only a spokesman for policies he surely cannot believe in.
There is, however, no quarrelling with the results – they have been utterly disastrous, helping to induce socially destructive levels of unemployment and economic contraction in large parts of Europe, and now open political insurrection in Italy. Praise from Mr Rehn – according to the economics commissioner, Britain is to be congratulated on its fiscal austerity – must therefore be seen as a form of petrification. Europe is steadily freezing over under his gaze.
Superficially, there are of course lots of similarities between what Mr Osborne is trying to do here in the UK and what Europe is imposing on its troublesome periphery. Virtually all advanced economies with big budget deficits are now engaged in varying degrees of fiscal consolidation.
Yet there are also key differences which set the British version of austerity, such as it is, apart from the sort of self-defeating fiscal consolidation we are seeing in the eurozone. This is now unambiguously apparent in the data. Revisions to UK GDP published on Wednesday show that last year the UK economy grew 0.3pc, and actually quite a bit more if you ignore disruptions to production of North Sea oil. It now appears that onshore Britain never had a double-dip recession. Unemployment is also falling, with substantial private sector job creation.
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