Brown's black period

Open Europe on their blog today have published the findings of careful research on the progress of starling as a currency.

They have effectively demolished one of Gordon Brown's taunts at David Cameron. At the time of Black Wednesday (16th September 1992) Cameron was a minor part of a Treasury team. Brown has regularly retrospectively promoted Cameron to the leader of the team in charge when the value of sterling fell rapidly.

The blog deals with the problem that in 1992 Sterling had a declared value against the Deutschmark, while in 2007-08 it is reckoned in terms of the Euro.

The findings:

1) On Black Wednesday the value of sterling fell by 12%, and by 5th October by 14%.
Since Brown became Prime Minister sterling has fallen in value by 14%

2) Brown could claim that nine months after Black Wednesday, in March 1993, the pound reached its nadir - a fall of of 16% since Black Wednesday. However, after 12 months it was only 10% down.
If sterling continues for a twelve month period under Brown at the present fairly constant rate, the loss of value could well be 18% or even 20%

3) Sterling is plunging - yesterday it was the only currency to fall against the dollar, itself weakening against the Euro

The fact that sterling continues as an independent currency means that Britain is able to take advantage of its relatively weak valuation. This should give a boost to exports at a time when other countries are struggling. Those struggling most of all will be those who joined the Euro and who have domestic inflationary pressures.

Gordon Brown, for reasons not entirely clear, held back from joining the Euro. This gives us a chance to set our own interest rates and to allow sterling to float against other currencies.

However, there are fears that the new treaty/constitution may drag us squealing into the Euro.