Would The Pound Benefit From A New Prime Minister?

Posted by Allison on 11 June 2009, 11:08

It’s an interesting question, isn’t it?  But to speculate on an answer we should look at how things are positioned at the moment.

Prime Minister Gordon Brown was never voted into government in the first place.  He took over from Tony Blair when he gave up the post.  This means that Brown is unelected – a fact that many people feel cheated about.  If he was doing a great job and people liked him then it probably wouldn’t matter.  We could overlook it.  But as we all know, the majority of the country is very dissatisfied – to put it mildly – about his performance.

There is really no individual aspect of his tenure as Prime Minister that you can look at and say he did a good job on.  But the question we have here is whether his continued position as Prime Minister is actually damaging the pound on both the short and the long term.

Let’s consider this carefully.  Could one person really damage a currency in such a way?  He obviously doesn’t mean to cause any damage like this – he wants the UK economy to get back on its feet as soon as possible, just like everyone else.  But he doesn’t seem to have the ideas, the determination or the skills to be able to do that.

The first week in June was not a good week for the Prime Minister though – and that was keenly reflected in the exchange rates you would have seen on your currency converter.  The pound fell dismally against the Euro and the US dollar, not to mention other currencies as well.  And a lot of it seemed to be connected to the fact that ministers had walked out on their jobs and on the Prime Minister, and he was trying vainly to keep things together.

It makes sense when you think about it.  How inspired would you be to invest in our currency when our government can’t seem to keep itself together?

A typical example of the kind of news stories that have been hitting the headlines of late is this one from the Bloomberg website.  It illustrates exactly what has been going on, and it does make you wonder whether a stronger government would result in a better performance from the pound.  We’re not talking about miracles here of course, but it would make a difference.

We have even struggled against currencies you don’t normally see reported on that often.  Take the Indian rupee for example.  On the 1st June the pound was taking 76.9539, and that climbed to 77.3549 the next day and even higher to 77.6380 the day after that.

But as the resignations and drama unfolded, it soon started falling.  By the end of that week, all the pound could manage to bag was 75.8674.  That is quite a drop in reality, and it makes you wonder how much longer these kinds of results will happen while the present PM is still in power.

An election is looking more and more likely for next May though; the Prime Minister clearly doesn’t want to give up and he doesn’t want to call an election before then.  That’s because he knows he would be dropped if he did. 

But will his determination to hang on damage the pound even more?



  1. Ouch. This makes honest but uncomfortable reading – especially if you happen to be Gordon Brown!

    I agree though – why should he get to be Prime Minister just because someone else gave him the job? Why couldn’t he be voted in? It smacks of nepotism to be honest.

    And I think the pound has been struggling because of the state of the government. No one has any confidence in them and that doesn’t do our country any good at all. The best thing for everyone would be an election – even if Brown doesn’t want one. He is looking after himself, not the country.

    — Allison · Jun 26, 09:52 PM · #

  2. Couldn’t agree more – the sooner Gordon Brown is gone the better. He was never popular at all, was he? He might be remembered when he’s gone but only for making all the mistakes. I wonder how many more he will make before he finally goes?

    I just wonder who else will come in next. I suppose it will be a Tory government and even then I can’t see them picking up the pound and helping it to regain all its previous strength. That kind of thing takes years to get back doesn’t it? Oh well, here’s hoping things get better soon.

    — JamieK · Jul 28, 08:25 AM · #

  3. Well I got my wish eventually didn’t I? Now that Gordon Brown has gone we have a coalition government in place, and I certainly didn’t predict that when I made my original comments. I actually think I have more confidence in the coalition than I would have in a Tory government on its own, but mainly I am just glad Brown has gone.

    I wonder how we will remember him in years to come. Not as one of the best Prime Ministers we have ever had, that’s for sure. Ironically enough though the pound is still struggling now we have a new government, so things aren’t as easy or simple as we might like to think they are on occasion. Who else agrees with me?

    — JamieK · May 26, 06:27 PM · #

  4. What’s Gordon Brown doing now then? I’m glad he’s not the PM anymore but I wonder where we would all be now if he had stayed. Can you imagine PM Brown leading us through the mess we are in at the moment? Mind you we have it better than some European countries don’t we so I suppose it’s good we had a change.

    — Kate · May 16, 03:41 PM · #