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So if the UK is still buying/importing more or less the same goods/service as it did a year ago - and paying up to 18% more for them - you would expect the balance of payments to actually worsen in the short and medium term. Ditto with UK exports, if exporters aren't passing on cost reductions enabled by devaluation or if overseas buyers aren't buying any more of them even if they are cheaper.
In the longer term, of course, you would expect UK exports to increase and imports to reduce, in volume if not in value terms (expressed in Euro). But that also assumes that British exporters are geared up to ramp up production in response to increased demand. Given "goods" as opposed to services are such a small proportion of overall exports, the effect could be quite marginal on the economy as a whole. It will take a very long time before any increase in goods exports makes up for the loss of services exports to the EU when UK institutions lose their passporting rights.
So years from now, "economists" will still be wondering why the UK economy responded so little and so slowly to the devaluation stimulus - much as they wonder now at the continued absence of inflation. None seem to think the UK class structure, the lack of governmental fiscal stimulus or the destruction of Trade Union bargaining power has any role in all of this. Of course we know better!
Index of Frank's Diaries
Services, especially financial ones, have a much less mechanical relationship to GNP. The money never enters the UK financial sphere, is never taxed here, is never declared here. So, although financial services declare a fabulous value to the nation, the country only benefits from a shadow fraction of this value via wages (but rarely bonuses), and other land subsidies.
The UK is hevily represented in areas that provide no benefit, but has a hollowed out manufacturing base entirely unable to respond to increasingly favourable international trading circumstances
keep to the Fen Causeway
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