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April 25, 2011

Comments

Jim

I would hazard a guess that most of the 'stuff' in shops is non-UK produced, and there are no (or very few) UK based producers of said items. Also that what is produced here is more niche stuff, speciality production, not mass production competing on price. Hence a lower pound results in higher import values (perhaps not volumes) and largely unchanged export revenues (and volumes).

No one in their right mind is going to start a TV factory in the UK (for example) - the rules and regulations are phenomenal, and any current advantage can be wiped out in a few months of adverse currency movements. Far better to build it in the Far East - no problematic govt bureaucracy (none which you can't make go away with a suitable inducement anyway) and a generally much lower cost base, whatever the level of the currency at the moment.

The UK is happy to export its environmental pollution and Health and Safety dangers to the poor workers in the Far East. If imports had to be made in similar conditions to plants in the UK, then UK plants could compete, although the customer would pay considerably higher prices. But the UK wants it both ways - no pollution/unsafe working conditions here, but cheap stuff produced under precisely those conditions from abroad.

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