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LITTLE TO GAIN FOR BRITAIN BY DEVALUING THE POUND STERLING

(N.Z.P. A.—Special -Copyright.) Reed. 6 p.m. London, Jan. 16. Authoritative British opinion remains quite unconvinced that there is anything to be gained at present by lowering the exchange rate of the pound sterling, says the “Manchester Guardian’s’’ financial editor. “The important question,” he continues, "concerns the direct pounddollar rate." Asking, “What is the pound worth in terms of dollars,” he says: "Surely if British prices have been rising American prices have outpaced them, and it looks as if American inflation will carry the American boom at least through another year, if not two or three years.” He goes on to say that if the pound were devalued most European countries would almost certainly follow suit. The French. Belgians and Swiss are all longing for the opportunity to cheapen their currencies against the dollar without having to take isolated action. In Europe, therefore. Britain world gain no competitive advantage. Though some Americans favour concerted European devaluation. Congress might take it as a plot, to get more foreign goods into the United States. "The final crushing argument against devaluing the pound now,” adds the "Guardian’s” financial editor, "is that it would suddenly raise the question of British food subsidies and wages in a most explosive form. The prices of food and raw materials imported from the Western Hemisphere would be raised overnight and the Government would have to choose between increasing subsidies by a very large amount or letting the cost of living shoot up bv something like 10 or 20 oer cent. The political trouble that could result may be inevitable, but it will sure’v be postooned until we are readv to take advantage of the export stimulus.’’

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/WC19480117.2.48

Bibliographic details

Wanganui Chronicle, 17 January 1948, Page 5

Word Count
287

LITTLE TO GAIN FOR BRITAIN BY DEVALUING THE POUND STERLING Wanganui Chronicle, 17 January 1948, Page 5

LITTLE TO GAIN FOR BRITAIN BY DEVALUING THE POUND STERLING Wanganui Chronicle, 17 January 1948, Page 5