Quote:
Originally Posted by djfunkdup
Good.
Cheaper exports. A falling pound improves the competitiveness of UK exporters.
Increases demand for domestic products. Imports are more expensive, therefore consumers are more likely to buy UK goods which increases UK aggregate demand.
A low Pound is beneficial in times of a recession, because it is helping to increase aggregate demand. In 1992, when the UK left the ERM, the pound depreciated and this helped the economy to recover.
The current account deficit should improve as the value of exports rises relative to the value of imports.
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You seem to be assuming that we manufacture a lot of things. You also appear to be assuming that all or most of those things use a lot of parts made in the UK. Unfortunately, business people like James Dyson (arch Brexiteer) have been working hard ensuring all their manufacturing is outsourced to companies outside the UK (usually in China, or in the case of Dyson, Malaysia). In the case of someone like Dyson, the rising cost of importing is likely to mean the cost of exporting and to the consumer will go UP. This does, admittedly, depend if the've established a local subsidiary to handle the sales. However, a lot of UK manufactured goods rely on parts imported to UK the UK. The costs of those parts will go up, which will also drive the cost of the manufactured goods up.
You compare the situation now to the situation before we left the ERM, but you haven't factored in that we've had 30 years of businesses doing their utmost to outsource costly things like manufacturing and storage, with the tacit encouragement of the government of the time (both Labour and Tory). The economy was still heavily manufacturing based at that time. It's not now.