What does a lower euro mean for British firms who export to Europe?
A lower euro means exporting companies find it harder to compete because their products are more expensive abroad. Other British companies also face difficulties because they compete with cheaper imports from the Eurozone. But some companies, who buy from abroad, such as retailers, can often increase their profits as the euro falls because their imports are cheaper but they do not change the UK price of goods they sell. Should the UK be worried? We should be worried if a temporarily high pound against the euro forces some viable British businesses into bankruptcy. It also makes the economy unbalanced – manufacturing and exporting industries suffering at the expense of services. But for many people in Britain whose jobs are not affected by the high pound, a low euro is beneficial. Imported goods are cheaper to buy, as are foreign holidays. How much more will the pound buy abroad for British tourists this year? Last summer 1 bought about 1.5 euros, now 1 is worth 1.578 euros, a rise of 5
