Posted by Allison on 16 July 2009, 11:16
We’re all feeling the effects of the recession at the moment. But if regular priced goods of all kinds are becoming harder to afford, there is no doubt that increasing prices are even more difficult to cope with.
But that is exactly what Ford, the car company, has had to do in recent times. And the reason is because of the troubles the British pound has had in terms of the exchange rates. If you have been looking at your currency converter recently you will know that we’ve had some rough times when it comes to coping with a poorly British pound. And this has certainly had an effect on this company. You can read more about the story on the Telegraph website.
You’ll see that this story mentions that the British pound hasn’t been doing very well when it comes to its performance against the Euro. Now if you look up exchange rates over the last three months or so, you might wonder what all the fuss is about. The pound has actually been doing slightly better of late. Taking one random figure from the 5th June this year, the pound was bagging 1.1373 Euros. And just recently on the 10th July it had increased things to 1.1655.
So where has this decision come from? Well, to find out we need to look back further and then the story comes out. And we need to look back quite a way too, right back into 2007. On the 1st March that year the British pound was bagging 1.4844 Euros – quite a difference from where we are now.
It did dip back to the 1.46 region for a couple of weeks, but then it was back into the 1.47 region again. It stayed like that until the middle of June when things got more interesting and the pound upped things to 1.4822.
But by the middle of September the first signs of a downturn were in evidence. Figures in the 1.42 and 1.43 region started to become more common, and it was almost as if the first signs of the recession were making themselves known. And from the 15th November the exchange rate had gone down to 1.3988. These were obviously the signs that Ford has been talking about, and the prices they have had to contend with over the past eighteen months or so.
And as we know, as 2007 gave way to 2008 and then into 2009, the exchange rate went steadily in favour of the Euro and the British pound lost out majorly. We’ve lost out on nearly thirty five Euro cents in that time, which is a huge amount to have to lose out on.
So we can see now that Ford really has had a rough time of it over this period. Perhaps we can expect prices to go up more than once before this is over, and maybe other companies will get involved as well? Only time will tell.
It is interesting to read about how the exchange rates have such a big effect on so many things though. And in this situation, the British pound has hurt not only a British company but the British people who might otherwise have considered buying a car.