the exchange rate between the Pound and Euro. What is happening is nothing more than normal fluctuations and has no impact on people's everyday lives.
really? An 8% rise in the value of the pound against the euro in less than 9 months(and 15% rise since 2009), has no impact, say on a company making cars in UK exporting to mainland Europe, like say Honda, who have just massively scaled back production in Swindon, probably due to the wafer-thin margins in Civic-class cars, of typically less than 5%, being completely wiped out by the change in the pound/euro exchange rate in the last year or so?
http://www.xe.com/currencycharts/?from=GBP&to=EUR&view=1Y
And why would BMW's MINI be so anxious to move production to Holland, if their Oxford base was so advantageous?
And why would GM Europe have not confirmed 100% yet as to whether Ellesmere Port will get a large slice of the new 2016 Astra's production? With the rise of the pound GM's Detroit accountants will be pushing for maximum production in Gliwice, Poland, then Ruesselsheim, Germany and a remote last Ellesmere Port, unless they can blackmail the UK govt. to provide tens if not hundreds of millions of tax pounds 'sweeteners', less the plant be closed on uneconomic cost grounds.
The rise of the pound, and the huge fluctuations of fx rates going on generally, is a massive factor, one being ignored by the UK press, for obvious reasons, but almost daily now it is cropping up literally on the bottom line. After Ford's Q1 profits were impacted by the devaluations ongoing in South America, VW reports today that its profits have been hit by the devaluation of the ruble:
http://europe.autonews.com/article/...arter-profit-jumps-22-boosted-by-audi-porsche
'Profit was hit by negative exchange rate trends, especially in South America and Russia'
Now Russia is important. JLR has in no small part been saved over the 2009-2013 period by the boom in SUV sales in oil-rich Russia. Now look at this graph:
http://www.xe.com/currencycharts/?from=GBP&to=RUB&view=5Y
The pound has risen by one-third! against the ruble in just over a year! I know that there are huge profit margins in things like Range Rover Sports and X5 Ms and the like, but even so, a rise of this size has to end up on the bottom line, as it has with VW Group already, meaning either JLR accepts much lower margins in its Russia business or it hikes prices to protect its margins, meaning fewer sales; i.e., it's a lose/lose position.
This IS happening behind the scenes, and JLR especially will be being screwed to the floor right now by the pound's huge, unwarranted and perverse rise, given the UK's underlying true economic position.
It will eventually come out, just like it did for John Egan's Jaguar Cars in 1988, when the pound went mad against the US dollar, and the run up of the pound in the second half of the 1990s(again on the back of a UK 'housing recovery'), against the Deutschmark(/euro) from around £1 : DM2.2 to £1 : DM3, which contributed decisively to BMW ditching Rover Group, and with the certain to follow calls from the CBI, Institute of Directors, Chambers of Commerce etc. within months now, for help with the 'strong pound', i.e. no interest rate rises ever, and more money printing, 'QE', to debase the currency further, to drive down its exchange value.
