The Currency Formerly Known As Sterling
With thanks to the Financial Times
As we know, the UK's performance has been extremely poor in terms of both health and economic outcomes. In Europe, only Spain has suffered more deaths and a (marginally) larger drop in GDP. The UK also has an unusually high number of excess deaths, estimated at 67,500, the official 44,436 figure for COVID deaths added to 23,153 more people dying in 2020 to date than in a 'normal' year. Worryingly, medical professionals speculate that excess deaths may be attributable in part, to people going undiagnosed or untreated for chronic conditions as a direct result of lockdown.
The pandemic is revealing structural fault lines in our system, politically, obviously, but also economically. It's becoming clear that the sheer scale of the economic support programmes required mean that future generations will certainly have to pay for decisions made today.
All of this couldn't be coming at a worse time for the UK, with four years of Brexit chaos undermining our standing on the world stage and our ability confront new crises. Whilst we voted to vacate our spot at the top table politically and in terms of leadership, in the economic sphere, our spot at the top table has been removed without ceremony. One sign of this has been the long-term depression of the Pound Sterling.
The Pound is the world's oldest currency still in use and which has been in continuous use since its inception, but in recent years it has taken a beating.
With thanks to Jacob Rees-Mogg
In each of the three recent crises, the pound has taken a disproportionately big hit. The global financial crisis caused the currency to plummet harder and faster than its competitors. During the subsequent recovery, the pound recovered to something like its long-term average until the EU referendum. The referendum result weakened sterling against the euro by 5% overnight. By October 2016, the exchange rate was €1.12 to the pound, and now it trades around €1.09. The UK's failure to manage the crisis has added vast costs to an already difficult situation and our perceived economic incompetence will put further downward pressure on our currency.
Reading the news, we often hear variations on the sentence, 'when the inquiry [or inquest] into our COVID-19 response takes place...'
There is no guarantee, of course, that there will ever be an enquiry, if Cummings stays in power with either Johnson or Patel as figurehead, we can be assured that every effort will be made to quash proper scrutiny of the Government's response or the thinking behind it. However, on a separate topic, when the UK's excellent investigative journalists get their heads down, there is a genuine scandal to be unearthed involving the funneling of taxpayer cash to shady companies (often related to Tory figures) for the emergency, no-tender procurement of PPE and other equipment.
Enquiry or no, when this crisis ends, whether it be through a vaccine or a (hard to imagine) effective testing regime, it will be a hard sell for the Government to blame Remainers, judges, the BBC or Europe, much as they might enjoy trying. Exhausting as it sometime seems, it is essential that we continue to hold the Government to account, to learn the lessons of the last 10 years and continue to build a viable opposition to the dangerously unstable parties of Westminster.
Have a great week,
James and the Renew team
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