Maybe not but that's where the part of size comes to play. US and Eurozone have +300 million people backing it's currency so if you want to compete you better have some tricks up your sleeve. Something to sell to the world, offer high yield, etc...
Does anyone else at ET know basic international economics? The obvious point is being missed. A weak British pound helps exports by Brtain, makes imports more expensive coming into Britain and brings more tourism into Britain on the back of a cheap currency. This is what you would want for your country in a global recession.
This is what the US has been trying to do for the last decade or so and look where it has brought them.
What does Britain export? Arms and financial services. Merrill Lynch booked all there CDS in London and will not be paying corporation tax for 60 years.
a weak currency wont take a country anywhere but hell. it could help to balance the current account as you mentioned but it is a false benefit as the devaluation soon brings inflation which further devalues the currency and creates economic turmoil. only countries with strong currencies could sustain economic growth on real terms (not nominal) as price stability acts as lubricant that boost economic confidence and investment. uk needs stability otherwise they wont be able to get back on thir feet. i am pretty sure, the euro would offer them some protection, while the pound might drag further down due to its inherent weakness.
http://www.order-order.com/2008/12/zimbabwean-central-bank-endorses-uk.html Some people got upset when Guido compared Britain to Zimbabwe, in defence it should be borne in mind that making the comparison does not belittle the suffering of the Zimbabweans. It seems Zimbabweans too are making the comparison; no doubt Gordon (and Vince Cable) will be cheered by this endorsement from the Reserve Bank of Zimbabwe: As Monetary Authorities, we have been humbled and have taken heart in the realization that some leading Central Banks, including those in the USA and the UK, are now not just talking of, but also actually implementing flexible and pragmatic central bank support programmes where these are deemed necessary in their National interests. That is precisely the path that we began over 4 years ago in pursuit of our own national interest and we have not wavered on that critical path despite the untold misunderstanding, vilification and demonization we have endured from across the political divide. ....leading central banks in the global economy are bailing out troubled economic sectors to achieve macroeconomic and financial stability....the Bank of England... providing a £50 billion lifeline to the UKâs banking sector. Here in Zimbabwe we had our near-bank failures a few years ago and we responded by providing the affected Banks with the Troubled Bank Fund (TBF) for which we were heavily criticized even by some multi-lateral institutions who today are silent when the Central Banks of UK and USA are going the same way and doing the same thing under very similar circumstances thereby continuing the unfortunate hypocrisy that whatâs good for goose is not good for the gander.... As Monetary Authorities, we commend those of our peers, the world over, who have now seen the light on the need for the adoption of flexible and practical interventions and support to key sectors of the economy when faced with unusual circumstances. They seem to think that Gordon, far from leading the world, is copying Mugabonomics. They may have a point... Via : Naked Capitalism