Originally Posted by
roger_ramjet
Much as it grieves e to say it, rA would appear more correct - sterling has weakened against the Euro by a tad under 20% since June 2016 (including market expectation weakening in the lead up to the vote), and, although it also weakened against its 2001 value as well by June 2016, the rate of fall was nowhere near as drastic. Had we voted remain I suspect the market would have bumped sterling up a bit to maybe 1.35. But the Euro itself is in no great shape following the mediteranean member weakness and financial collapse (Greece, Portugal, Spain, Italy...). It too had fallen against the USD and other major currencies in the period. So which is in a worse condition: I suppose that the market has favored the euro over sterling gives us a clue but what the future holds remains to be seen
As for inflation, clearly a lot of that is imported inflation down to the exchange rate weakening - ie the cost of imported goods has risen in sterling terms but not in forex terms. This would make our inflation rate higher in the UK than that in the stronger currency nations such as those in the Euro. Since we make virtually nothing, our inflation levels are not likely to be due to internal price rises, except perhaps in financial services where we are still strong. Wage driven UK inflation has been limited over the past several years, thankfully, but perhaps this is due to imported labour not having UK workforce demands (and expectations) for increases since much of their income is repatriated to lower cost of living areas.
Question is, is a little inflation a bad thing? I would suggest not: low interest rates and low inflation point to an under-stimulated economy. For us to make Brexit a success we need to stimulate our economy which means inflation is a likely inevitability: so this needs controlling. Zero or low inflation rates are not necessarily a good thing, except to those on fixed incomes such as pensioners.
But, looking on the bright side, the inflated ego of one former member seems to have been punctureddd.