While appreciating that in inhabiting a ‘post-truth’ era accuracy is being increasingly eroded into irrelevance, I was nevertheless disturbed by the factually misleading editorial opinions expressed in the Observer of January 19.
The offending editorial stated, ‘The pound has dropped a little and will nudge inflation a smidge, as a result - but in a historical context it is a minor blip.’
Since the EU referendum the value of sterling has in fact fallen by approximately one sixth, so the phrase ‘dropped a little’ shows at best a remarkable capacity for understatement and at worst ideological inaccuracy.
Six-hundred pounds sterling is now worth about £500 compared with 2016 and one wonders how much the pound needs to fall for it to be considered significant?
Historically the pound was devalued in 1947, 1967 and 1992 with Harold Wilson disingenuously claiming on the second occasion that ‘this will not affct the pound in your pocket’.
Well it will and a fall in the value of of currency of about 16 per cent that we have suffered consitutes a devaluation of sterling (which may well worsen when Article 50 is triggered and the negotiations proceed).Economists’ predictions are generally that inflation will run at around three to four per cent per annum in the immediate future although price rises have only recently begun to appear and we are still, of course, within the EU.
Such predicted levels of inflation are not historically high when compared to, say, the 1970s. However, this needs to be put into context with most welfare and benefits frozen and the majority of employees experiencing wage stagnation not experienced for decades, indeed going back to the Victorian era.
In addition, it needs to be borne in mind that the highest price increases will be for basic items like food as well as luxury imported goods.
This will have significant and potentially dreadful consequences for the poor and those on low incomes as well as public services such as the NHS, which impacts heavily on drugs and medical equipment.
Thus, when the effect on inflation is described as ‘a smidge’ this illustrates the wilfully naive gung ho complacency of David Davis and his fellow Brexiteers, which, while it may be viewed on one hand as amusing foly is lon the other hand a complete refusal to face the severe economic consequences of decisions made on the majority of the population.
But then, if you are not near the bottom or in the lower income ranges of what is already the most economically unequal society in Europe, maybe you can afford to turn a blind eye to the economic consequences of a devalued currency and rising inflation.