DENISE WALTERS

My savngs are rapidly disappering interest soooo low now might as well keep at home. The government in UK is giving saver no incentive to save or even trust the banks with their money.
A friend of mine has already lost a hundred thousand pounds in investments Bad times folks

Wendy Nesbeth

We lost just under a Hundred thousand pounds just after 9/11. That was our nest egg for our retirement.

It makes me feel sick everytime I think about it.

Wendy x

bigglesworth

Denise and Wendy,
Chin up, it is always darkest before the dawn. Which isn't imminent but WILL happen.
The short term issue for governments is to stabilise the world economy. Thereafter they will have to address the issue that, to some extent, the last 10 years were a debt fuelled mirage. And Gordon was one of the principal architects of it, by using low interest rates to keep his own cost of borrowing down, and using every trick in the book to force savers into buying government debt.
Now he has run out of people prepared to lend him money. The ONLY way the UK can get out of this mess is by encouraging saving to lend to the Government. That WILL mean higher interest rates.
Given the probability that Gordon has deliberately engineered a return to inflation to inflate the UK's debt away, this is not unalloyed good news, but my guess is that, given the parlous state of UK finances, the markets are going to demand a premium to that rate of inflation

DENISE WALTERS

I know how you feel Wendy
Well we got to think positive Biggles up and onwards I guess no good thinking what if.Wont solve anything

bigglesworth

Denise,
Realistically, most of the bad news is already in the pound. They will keep trying to knock it, but the very real problems in the Eurozone are going to far outweigh anything they can say about the pound, which after all has last a THIRD of its value. We have NEVER had a drop like this before.
I think the government was complicit in depreciating it. At 2.0 dollars o the pound, they needed to borrow 240 billion dollars to finance 2009/10. Now they only need 180.
But I think they overdid it. And if that is the case, markets have a habit of bouncing back further than you think also.
I actually think 1.30 against the Euro is probable, perhaps next year and if the ECB does not act soon, you could even see 1.50 again in a year or two.

costaman16

Can anyone see the £ being as high as 1.35 again against the Euro? My Euro s are running out here in Spain and I am dreading having to transfer money from the UK at the moment. Need some good news from Gordon for a change me thinks

jackytoo

Predicting in the news today that the Bank of England may cut interest rates again this week. Could be another fall for the pound

bigglesworth

Lots of bad news coming from Eurozone economies over the next few months. Riots in nearly every country. Eventually, the markets will wake up. I certainly think 1.35 is possible in the mid to long term, but you would need a seismic shock in the short - something like Ireland or Spain threatening to withdraw. Which is possible, but not likely yet.

arko

Thought this might be interesting. Be warned though, David McWilliams is known as the 'David Beckham' of the Irish media, in terms of self-publicity.

http://www.telegraph.co.uk/finance/g...ist-warns.html

Econ

Don't hold your breath on Spain withdrawing because they will not... at least not in the near future, although things might change later when the Spanish people realise that payback time is for the rest of their lives and the actual state of the economy shows it's true face and it sinks in. So you could be right when you say 'not likely yet' although what are the penalties if they did...

I did read somewhere a couple of months back that some people where trying to get a movement together to gain support on the Irish pulling out, but that was a minority thing at the time, I don't think there was/is any support in the Irish government for pulling out.

Econ

Yes, this is old hat 'as such', I read the same thing by the same person at the end of last year if my memory serves me. 'Might even have been in the same place (Note it was * updated * on the date shown)'.

I personally don't think there is enough support in Ireland for pulling out, certainly not at government level (at least not for the moment).

bigglesworth

Econ, I agree. It will take time (possibley a year or so) to sink in.
But Spanish unemployment at 14% is tough. Forecasts are as high as 20 percent by end 2009. And there are not many ways to shrink deficits inside a single currency. So it will almost certainly get a very great deal worse. There are riots with unemployment at 14% - what will happen when it rises through 20 and keeps rising?
I don't know that Spain et al will leave- it is enormously difficult. another argument against it s that it is expensive. But Spain Greece etc are ALREADY paying 2 to 3 per cent more as an interest rate than Nordic countries. Which means there is not much more to lose there.
So the pressure on the ECB to recognise the consequences of their strong Euro policy are going to get unbearable. They will have to work it lower.
In fact, given the social problems that are likely to break out over Europe over the next twelve months, I doubt they will be able to stop it. Especially with America edging towards a trade war.

Econ

Yes, I think the whole idea of Europe sounds great in practice but in reality it is a recipe for disaster, I cannot understand how so many politicians and Brussels burocrats think that it is possible for * continued * growth... and that is what Europe needs to work. When there is no growth it will come down like a lead weight and all the Euro governments can do is blame America! You cannot sustain the amount of * non efficient * labour and tax that governments lumber us with to pay for a redistribution of wealth on a massive scale like European governments do, when the money is there it's not noticed * by many * but when it is not * like now * where does that money come from? It is times like this that will break Europe and the bricks it is built on.

On an even more depressing side, think of the amount of growth there has been over the last several years, never before has there been so much growth on such a vast scale and yet Europe needs that scale of growth to work as it is set up to work now, you just need to stop and think for a few moments to wonder how on earth can that continue. Look at the amount of produce that has been imported into Europe over the last few years * from China alone * and the new member countries that have to mature fully along with the countries that will join later.... scares the hell out of me to be honest.

Prices of raw materials in Europe have soared because of demand from China and there are still all these new countries demand to come yet, where do the raw materials come from for those countries? and then continue. Why could European countries not give some tax relief to European manufacturers and so create jobs here in European countries? then we keep the labour here and the earnings, the 'possible' slightly higher prices for goods manufactured in Europe should slow growth down to a reasonable rate. Eventually prices in China and Tiawan etc. will be as high as they would be to manufacture here.... is that not what Europe should be about, creating work in Europe for European countries and people, sadly not as they tax the hell out of anyone that try's, so manufacturing has practically come to a standstill in Europe when we used to manufacture practically everything we needed.

shirley and anthony hide

There is an old saying in dealing circles ie "talking your own book"
Which means to justify ones position one looks only at negatives for opposite position. We all would like Stg to recover some ground against the Euro. Mortgage payments,Gbp Pensions stretching to live in Spain ,running costs of a house in Spain etc etc..
Fact is a speculator will go for a currency that would they thinkfind it most difficult to defend itself. UK and Euro economies probably as bad as each other,but UK has lame duck government that makes Forrest Gump look shrewd.
A speculator or speculators taking on the Euro will be taking on umpteen countries. Take on UK (remember Soros) no contest .You always pick off the animal outside the herd first.Fact is Stg has been on a long term dowtrend for years.Ask yourself if there was trouble in Euro would I buy Stg as a hedge against it or Sfc or Yen or US$ or Gold. Gee thats a tough one.
Sorry to put a downer on Stg latesst recovery but another old saying is that its a "bounce of a dead cat"
If it gets to 1.20 I am selling it.

shirley and anthony hide

PS
I really hope I am wrong as well!