MarkG

When's the election? I'd expect a decent boost in the exchange rate for a few weeks/months after the Tories win.

I don't think Brown has more than a year or so left, does he?

Alphawolf

Fair one, he should be out now!!

Alan2005

I really hope not. Brown has been a disaster for the UK, more so since he became PM.

G77

Has to be completed by May next year I believe....

Best get the proxy forms completed now....

screene

My original post was made yesterday and I was talking about the 2c drop which occurred yesterday. The Q2 GDP figures released today have caused a further drop of over 1c.

Yesterday's fall was mainly against the CAD; today's against pretty much everything.

I think that the UK economy will begin to recover once the banks start lending again. Presumably that point will come in the not too distant future; after all, it's how they make money. I think that there will be a psychological boost when we get a change of government too, just like there was in 1997.

Alan2005

Banks aren't not lending out of spite - it is because they don't have adequate capital. Previously they could lend without affecting their capital ratios by raising funds using MBS, however this market has gone and won't be back any time soon (and 2/3rds mortgages in the UK were funded this way). This means that any lending they do has to be relatively risk free (i.e. no sub-prime, stupid multiples, or low LTV's).

Also, there is the small issue of the amount of debt in the UK - will a tory government have the stomach to deal with it? Will GB make it to the next election without making some other huge mistake and having to borrow/print a load more?

Scary time to be exposed to exchange risk imo.