Political woes hinder the Pounds progress

Posted 22 June 2009 at 08:52

Posted in Current Affairs

Political woes hinder the Pounds progress

One often wonders how the international world looks at the UK, and my God, what must they be thinking? How can we possibly throw punches alongside the world's heavy weights when our politicians are drowning in the throes of an expense scandal and our leader is literally fighting for his political life?

The problem comes when people at home are forced to sit and watch as our so called "honorable" run like rats from sinking ship. This is the country's management structure and these are our leaders after all. Unfortunately, it is becoming increasingly difficult for us ‘British' to defend our proud nation, especially when it is our own who are writing off the wall articles titled "Bail out Britain". I appreciate that this sort of thing happens all over the world and perhaps we are just too sensitive. Washing our dirty linen in front of the world's eyes may also be another reason why our currency is so susceptible to bad news.  

It has to be said that this is just about the last thing that the UK needs right now, especially at a time when things looked like they may just be on the turn around. Just to be clear, I'm not talking about the suggested green shoots of economic recovery here. That financial faux pas came at a time when UK firms and major financial institutions where announcing large-scale job losses and share prices were diving at speeds close to terminal velocity. I imagine whoever said that (it was the business minister in January 2009) is still struggling to regain credibility some 6 months later - woops!

No, the turnaround that I'm talking about is difficult to substantiate largely because it is underwritten by hope. Admittedly at this stage it's not much more than a glimmer of hope located at the end of an extremely long tunnel but its there. I see it every day on my way to work on the faces of those around me.

Yes, the banks are still getting a good shoeing and you know what they absolutely deserve it but at the end of the day these are the establishments that form the foundations on which Britain is ultimately built, so like it or not, we have to support them. Obviously nobody envisaged the credit crunch or expected a full on recession and even if the warning signs were clearly visible, you know what, we probably still wouldn't have listened.

True the availability of credit over the last 18 months has thumped every market from stocks and shares to currency but believe it or not there are small signs of recovery on the horizon. UK house prices for May 2009 have risen for the 2^nd time in 3 months which demonstrates at least some improvement in current market conditions. Recent retail sales figures and manufacturing figures have also demonstrated some positivity which has begun to filter through to the exchange rate. Sterling, the Pound now buys you around 1.16 Euros up from levels of 1.05 Euros to the pound seen only a few weeks ago. Is this a sign of things to come or will our political tension overshadow any indication of economic recovery? Only time will tell.