Roger Bootle in a Spectator blog (HERE) thinks we should celebrate the fall in the pound. He approvingly quotes for a newly published book the benefits of a lower pound. But the piece also contains this:
Unless something changes, the UK economy is heading for the rocks. This is not because of the consequences of Brexit. On the contrary, the factors that we identify in The Real Sterling Crisis that cause us such unease predate Brexit, or even the chance of it, and have practically nothing to do with it.
On the face of it, the British economy does not look too bad. But we are not paying our way in the world. Every year, we are borrowing and selling assets to the tune of about 5% of GDP. This is rapidly increasing the amount of our economy that is owned by foreigners. This would not matter so much if we were using the money provided by foreigners to invest in productive capacity. But we are not. UK investment is extremely low. We are borrowing and selling assets in order to maintain our standard of consumption.
The book laments the selling of British assets to fund consumption but a falling pound will only make matters worse, our assets are now 20% cheaper than they were in early June.
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