Sterling performance
Laut Boris Johnson, dem neuen britischen Premierminister, kommt der Brexit – auch ohne Vertrag. Das dürfte das Pfund weiter fallen lassen. Warum behauptet eine Schlagzeile das Gegenteil? IAN MCMASTER erklärt es Ihnen.
As I was surfing the internet after Boris Johnson had been voted into office as Britain’s new prime minister, a headline on the BBC’S website caught my eye: “Sterling: Sky is the limit”. It is natural for new prime ministers to have a honeymoon period when they take office, and there had been much discussion about a potential “Boris bounce” for the Conservative Party and the British economy. Yet the headline still took me by surprise.
It seemed highly unlikely that a change of prime minister was going to cause a significant increase in the value of Britain’s currency, the pound, known formally as “the pound sterling” or, simply, “sterling”. (More colloquially, people use the term “quid”, always in the singular, as in “I spent 20 quid in the pub last night”.)
A rise in sterling seemed implausible because Johnson announced that he planned to take the UK out of the EU by the Halloween deadline of 31 October — “do or die”. In other words, Brexit would definitely take place, Johnson said, with or without a deal. As always, economists disagree on the consequences of a no-deal Brexit, but most believe there is a serious risk that Britain would be pushed into a recession, suffer a significant loss of gross domestic product and see a fall in the value of its currency.
The pound fell dramatically after the Brexit referendum in 2016. By the time Johnson took office three years later, it
had lost around 15 per cent of its pre-referendum value against both the dollar and euro. Following Johnson’s “do or die” statement — and notwithstanding his comment that the chances of a no-deal Brexit were a “million-to-one against” — the pound fell further. Some experts believe sterling could fall to parity with the euro (or even the dollar), having stood at around €1.30 ($1.48) at the time of the referendum.
Other things being equal, a lower pound boosts British exports and encourages tourism to the UK, thus it could help to stabilize the economy over the medium term. But a falling currency also raises import prices — including those of food and petrol — thereby cutting living standards, and increases the cost for Brits to go on holiday abroad. As the Financial Times wrote: “A further devaluation … will not make the country more competitive but merely reflect that it has become a far less attractive place to do business.”
So what about that “Sterling: Sky is the limit” headline that I saw? On closer look, it turned out that it wasn’t about the British pound at all, but rather about Raheem Sterling, a star footballer for Manchester City and England. And sure enough, Sterling made a flying start to the new season in England, scoring three times in the first game — against my team, West Ham.