Are the ‘boasting rights’ of the pound at an end?

LBS’s Richard Portes gives his thoughts on the recent fortunes of Britain’s pound

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In Pound’s Swoon Echoes Declines in British Power, Past and Present, the New York Times’ Patricia Cohen reflects on the fact that the Bank of England had to step in Wednesday (September 28th) after markets deemed a new government economic plan unwise. The pound has however, observes Cohen, been on a longer slide.

“Britain’s pound coin — rimmed in nickel and brass with an embossed image of Queen Elizabeth II at the center — could always be counted on to be significantly more valuable than the dollar,” writes Cohen. “Such boasting rights effectively came to an end this week when the value of the pound sank to its lowest recorded level: £1 = $1.03 after falling more than 20 percent this year.”

Commenting on the fortunes of the pound set against other currencies such as the euro, London Business School’s Richard Portes says, "currency exchanges have enormous swings over time. The euro was worth 82 cents in its early days, he recalled, and people referred to it as a “toilet paper” currency. But by 2008, its value had doubled to $1.60."