Except that the North American distributor sets the prices, and we are NOT benefitting from a weak Pound Sterling. Naim is relatively expensive here in the States vs. the UK.
Not a problem!!!
In summary I think the answer to the original question is that itâs a bit of both. Some aspects of life will improve as a result of a weaker pound, others will not. The impact on the individual will vary depending on their own circumstances but over the years there will be periods when one wins and when one loses, nothing is forever and nothing is certain.
Itâs strange on the other hand that being in the EU we have to import so much lamb from NZ presumably as itâs cheaper despite the EU subsidies.
In terms of carbon footprints however seems crazy that weâre worried that home produced produce may be in surplus when weâre happy to import meat from the other side of the planet.
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Yes, of course with weak sterling the required imports, given that the UK has to rely on imports from the EU, will be more expensive. Furthermore with the exit from the EU Market there will be tariffs applied to these imports, making them effectively much more expensive than today.
This will result in rises in inflation.
So how does the Chancellor stop the UK economy going out of control?
Lowering interest rates will only have a limited affect as they are already low and close to zero. Do they put them in a negative level, i.e. it costs the banks to move money on deposit?
Thatâs no a good long term fiscal strategy.
And yes, holidays in Spain/France/Italy/Greece etc. will be more expensive & when aboard the cost of food/drink will be higher.
So this will put pressure on required wage rises to maintain standards of living. Now with reduced export market capacity, as the UK will have exited the single EU market and reduced spending capacity with the UK home market, where are the business/employers to get the increased company performance to meet the required salary rises and cost base?
They wouldnât be able to, so living standards will drop as inflation and costs rise.
And 50%+ of the UK population votes for this!
Yes, itâs not have to, but NZ lamb is ridiculously cheap. Presumably their farmers donât make much (and that is not suggesting British farmers do).
Perhaps Iâd forgotten seasonal effects too when lamb may be scarce at home.
I gather most lamb from NZ is halal too - not sure how I feel about religious butchering practices in general unless I was actually killing the animals myself and belonged to one of those specific groups. Ultimately probably no nice way to go if youâre an animal - ripped apart by a predator, human or animal, or harvested in large commercial abattoirs.
The following graphic published in Feb 2019 shows farm gate prices per kg dead weight.
I donât have any answers but it does look like NZ & Aus prices have both increased from the 5 year average to become closer to UK prices at the start of 2019
There are both positive and negative aspects to Sterlingâs decline.
Negatives:
As a consumer of imported goods or goods containing large amounts of imported content and travel to most foreign countries becomes more expensive.
Companies that import into the UK will see their profit margins decline as their variable costs increase
Investors and pensions whose funds are in foreign currencies will see their value grow
Positives
UK producers should see an increase in domestic market share and revenue as foreign competitors become more expensive
UK companies whose business is primarily abroad will see their share prices increase
Any investments denominated in US$ or ⏠will grow in £
The UK FTSE index has already and will probably continue to increase in value
When looking at foreign trips, itâs virtually impossible to time the market based on currency value and time frames are simply too short. Buying a house abroad is differentâŚnow would not be a good time to buy a house in US or Europe unless you had foreign fundsâŚhowever you may need to delay your purchase for several years for sterling to recover.
One word of advice. If Corbyn or indeed Labour looks likely to be elected, you really should consider dumping Sterling wholesale as their current policies will almost certainly bankrupt the country and that will have a MAJOR impact on Sterling that will make Brexit look like a minors hiccup. The thing to watch is when investors start shorting Sterling in large numbers. This will happen to some extent before an election, the degree to which it happens depending on Labours chances of gaining a majority.
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