and why does it mean that everything therefore costs more to buy?
2006-12-14 23:39:04 · 10 answers · asked by heroverthere 1 in Business & Finance ➔ Other - Business & Finance
It's a tricky question. However, it is strong because people are prepared to invest in the £. There are many factors for this, control of the money supply (Theoretically) interest rates encouraging saving, etc.
A high £ will mean that, in comparison, foreign products are cheaper, since you will be able to buy more with the same amount of money. Unfortunately, this has the opposite effect on exports, which is bad for British businesses wishing to export.
2006-12-14 23:45:08 · answer #1 · answered by Alice S 6 · 0⤊ 0⤋
I did not know Britain has the strongest currency, but if in fact that is the equation, it is a direct reflection of the skilled work force in finance and investments.
When the aggregate whole population of Great Britain makes mostly the best financial decisions the pound is strong and stable.
Therefore the commerce they supply to the rest of the world is expensive.
When the world wants to buy from Britain or visit Britain demand is stronger than supply therefore driving value and prices sky high.
Enjoy the prosperity while it lasts.
2006-12-16 23:46:35 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Britain's currency is strongest right now, because people have more confidence in it that in other major currencies. They are all funny money based on an unfulfillable promise. (Take your fiver to the Bank of England and ask for the five pounds it promises - they'd just print you a clean one!) From time to time, some economies are seen as less likely to pay their debts than others, and their currency falls in value. It happens to sterling every so often.
When currencies move against each other, you get bargains in the country whose currency has fallen. When currencies stabilise, the price of goods stabilises. Right now, many goods are cheaper in the US than in the UK - but you can bet that there's a shipload of them on their way.
2006-12-14 23:56:29 · answer #3 · answered by Anonymous · 0⤊ 1⤋
It doesn't. Currencies fluctuate. 30 years ago the dollar was about $2.40 to the £. Time was when it was $4 to the £, hence a half-crown sometimes used to be referred to as "half a dollar".
Sadly, the logic of locally-produced goods being cheaper in countries whose currency is low and imports being more expensive is somewhat simplistic. Eventually it boils down to having so much money you can spend and having to make sure that your discretionary spending is directed towards whatever's cheaper than at home or is not available at home. Even when American companies are competitive in price, they're very poor at exporting.
2006-12-15 00:16:18 · answer #4 · answered by Feinschmecker 6 · 0⤊ 0⤋
actually it depends. But GBP is an alternative to the dollar since it has a high interest rate compared to other industrialized countries. It attracts foreigners to park their money in GBP causing it to rise.
2006-12-14 23:47:47 · answer #5 · answered by CHF_charley 1 · 0⤊ 0⤋
right, London is a very thriving City for finance matters, salaries are high but cost of live too, thats why so many travel or settle abroad
2006-12-14 23:44:21 · answer #6 · answered by Anonymous · 0⤊ 1⤋
The first question, God only knows with the muppets we have in charge.
The Second question Because of the muppets we have in charge
2006-12-14 23:50:37 · answer #7 · answered by tradcobdriver 4 · 0⤊ 1⤋
BECAUSE THE GOVERMENT CARES MORE ABOUT FINANCE THAN ABOUT ENGLAND TURNING INTO THIRD WORLD COUNTRY NAMED ENGLANDSTAN WITH INDIANS...
2006-12-15 00:41:38 · answer #8 · answered by Anonymous · 0⤊ 0⤋
IT WORKS OUT......HIHI HAHA sorry I'm in such a stupid childish mood right now.
2006-12-14 23:47:26 · answer #9 · answered by jessieket04 3 · 0⤊ 0⤋
One word- INTEGRITY.
2006-12-14 23:49:27 · answer #10 · answered by Not Ecky Boy 6 · 0⤊ 1⤋