What would an economist say?

Retail sales growth is unsurprisingly depressed.

The pound has fallen below $1.30 this morning.

Beyond the UK, the Fed is having problems making the idea of interest rate rises stick.

They’re just a banking fantasist’s pipe dream here.

And the FTSE 100 sales on at near record highs

The markets are trying to ignore reality.

Reality is biting back.

And its message is deeply uncomfortable. I do not see that changing. And sometime the markets will note.

An actual economist would note that 75% of revenues to FTSE 100 firms are from outside the UK and not in sterling. A declining pound therefore raises he £ value of such receipts and profits.

Actually, that in the absence of any other influences (you know, that ceteris paribus bit) the FTSE 100 and the sterling exchange rate are inversely correlated?

But then that would be an economist, no a Senior Lecturer in international political economy at the technical college of a London borough.

As we get from the comments, on 21 May we had:

Duh….

The peak is because the pound is fallen. These are wholly connected variables. Because so many FTSE 100 companies earn their profits in anything but sterling if the pound falls the value of their profits (in sterling) rises and so does the share price.

Not one of their brightest moments.

10 thoughts on “What would an economist say?”

  1. “An actual economist would note that 75% of revenues to FTSE 100 firms are from outside the UK and not in sterling.”

    The bizarre thing is he said exactly that a few months ago in a blog post. I think I even said on here at least he’d learnt something. How can he forget? Or does he think his readership is so stupid as not to remember themselves?

  2. The smaller post from TRUK today is vintage:

    ‘That’s Bryher, in the Isles of Scilly. For the record, they opted into UK income tax in the ’50s. They got the NHS in exchange.’

    I mean if I found out this guy was staying at my hotel I’d soon invent some excuse to get him out. Seems incapable of moving without seeking a confrontation with some ‘enemy’, real or imagined.

  3. Noel

    But as you have proven he is incapable of maintaining a consistent thread even within a post – to ask him to remember things from months earlier is surely too much!

  4. In other hilarity, he has caught up with the possibility of border chaos and is now predicting it. This has only been known from either EU Referendum or from various CILT or ‘Trade’ publications within the Road Transport industry for about 18 months. I am really not surprised he and his wife split up. She must be well on the road to recovery now….

  5. VP
    I am really not surprised he and his wife split up. She must be well on the road to recovery now….
    LOL!

    But she has had only brief exposure. What about the boys? They will have been scarred for life.

  6. Today’s special:

    “As I have already noted this week, despite supposed record numbers of people in work real and notional incomes are falling, which is not what economic theory says should happen in that situation.”

    With a link to a previous article of his that presents a graph showing that real and notional incomes are *rising*.

  7. @ aaa
    Murphy doesn’t know the difference between velocity and acceleration and uses fake data that significantly overstates real GDP growth under Gordon Brown, his favourite Chancellor.

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