Overvalued Pounds Holds back the British Economy

Overvalued Pounds Holds back the British Economy

In the article “Brown and King’s silence over Pound is Defending” the writer Matthew Lynn concerns about the overvalued pound; He believes that it resists U.K to join the single European Currency and hurts the British trade with other countries.

At the beginning of the December, the pound reached the $1.98, the highest exchange rate ever since 1992 while many economists expect it rises even more that it will be over $2.00 soon. As an open economy which depends on the international trade heavily, continual rising of the pound will hurt the British economy. However, the British politicians who still have the wound of the pound’s devaluation against dollars in the 1960s hesitate to mention about the problem of the overvalued pounds.

“The rise of the pound against the dollar is the biggest thing to happen to the UK economy this year - and yet it is the one subject the men in charge refuse to talk about.”

(The above graph shows the change of US Dollar to British Pound past two years. You can see better if you click the graph)

Battle for the world's largest whisky market--India

Battle for the world's largest Whisky market--India

(click the second title to view the article)

It is not only GDP of India had the enormous growth past 10 years, but the Scotch whisky market in India has been increased as much as GDP. As the average income of the young Indians has been increased, the demand for the whisky has increased rapidly and now India has become the largest market for the Scotch whisky that it consumes 40% more than the second biggest consumer, USA does.

However, Scotch whisky producers are still not much happy about the Indian market, as Indian government put up the enormous tariffs on the Scotch whisky; 525% of the tariff. Because of the high price, the Scotch whisky still remain as 1% of supply in whole Indian alcohol market. Moreover, the whisky producers are more concerned as India has been started to develop its own whisky industry, and a bottle of the domestic whisky is only cost 200 rupees (about 5 dollars) while the Scotch whisky costs 3000 (about 75 dollars).