GUILDFORD (MNI) – The trade gap needs to close and sterling may
well need to fall further to help it do so, Bank of England Monetary
Policy Committee member said here.
Weale said the trade gap was an important issue for him and that
sterling’s fall back in 2008 had had less impact on it than he had
expected, and that the currency may need to become more competitive
still.
“The depreciation that we had in 2008 I thought would do more to
close the trade deficit than so far it has, there may be a number of
explanations for that, the international trade environment hasn’t been
comfortable to say the least,” Weale said.
“The trade deficit will need to close further and sometimes I do
wonder whether the exchange rate might need to be more competitive than
it is at the moment in order to help with that,” he added.
Sterling fell sharply on its trade weighted index from very late
2007 through 2008, decling from 100.2 on its broad trade weighted index
on December 18 2007 to below 80 in December 2008.
-London Bureau +20 7862 7491; drobinson@marketnews.com
[TOPICS: M$$BE$]
