Mr Mills, a major donor to the Labour party and prominent Leave campaigner in the EU referendum, believes that the UK can become a competitive manufacturing centre if sterling falls to $1.05 for a sustained period of time.
The pound fell from $1.48 just before the EU referendum to $1.25 currently, but further falls could help the UK reach a tipping point at which the country can compete even with the likes of China, he said
“If the exchange rate came down to $1.05 it would become more
economical to site manufacturing in the UK rather than shipping goods in
from China,” he said.
“We’d need to get the exchange rate to that level to make it worth producing the vast range of goods you see in the shops.”
He noted that other rich countries including Germany and Japan have far larger manufacturing sectors than the UK, and blames, in part, a rise in the exchange rate from the 1970s and through the 1980s for making life tougher for British exporters.
A weaker pound would push up the cost of imported goods, hitting households in the pocket. But he argued that an improvement in jobs and wages across much of the country would work to offset much of this harm over time if the economy was revitalised by greater industrial investment.
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“We’d need to get the exchange rate to that level to make it worth producing the vast range of goods you see in the shops.”
He noted that other rich countries including Germany and Japan have far larger manufacturing sectors than the UK, and blames, in part, a rise in the exchange rate from the 1970s and through the 1980s for making life tougher for British exporters.
A weaker pound would push up the cost of imported goods, hitting households in the pocket. But he argued that an improvement in jobs and wages across much of the country would work to offset much of this harm over time if the economy was revitalised by greater industrial investment.
Read more
