The U.K. is once again benefitting form the fact that they decided not to begin to use the Euro. It would appear that they will not be hurt by the fact that disinflation is harming the Euro Zone. The Euro is still falling, however, the economy in the U.K. is going strong. The inflation rate is rising at a little above their targeted 2%. This has been the case since 2009.
This is why the U.K. is so smart for deciding not to join the economic EU and not use the Euro. They were the smartest country in Europe for avoiding that. The Euro Zone is a bad idea because there is no central control that can make them do things that are necessary.
http://www.bloomberg.com/news/2013-11-19/disinflation-no-risk-as-swap-gap-widens-to-record-u-k-credit.html
Agreed. The Eurozone was meant to compete with the US dollar, but I think it could be dangerous to have so many different histories, goals, and policies tied so tightly to one another. I still haven't totally made my mind up about whether the concept of the Euro is good and/or whether its application is good as well. However, I agree that the UK was prudent for not jumping in.
ReplyDeleteI too am dubious of the Euro. There are too many factors that can influence its worth, and the country with the strongest economy will be brought down by the weakest link. It has also created an obligation for some stronger countries to help out those in great need. The UK, on the other hand, doesn't have to keep other countries afloat just to save its own currency.
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