The article discusses the factors that caused the pound to lose value: Lack of confidence in the UK economy. If investors do not believe the UK is about to pick up, there are probably better places for them to put their money - notably other industrialised nations that are growing much faster than the UK is. More growth means more opportunity to make returns on assets. We discussed a number of these factors in our lectures in week 3 on the exchange rate.
This blog accompanies the econ101ab Principles of Economics course given at the University of Birmingham. The lecturers for both parts of the course (101a, microeconomics and 101b, macroeconomics) will occasionally post here on matters related to lecture material. We hope to show the relevance of the concepts we are teaching at each stage of the course for helping understand how the world works...
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