Comment by laurencerowe
25 days ago
There is no more sterling available because the tax burden has just been shifted from VAT to employer NICs.
25 days ago
There is no more sterling available because the tax burden has just been shifted from VAT to employer NICs.
There is more sterling available to FX, which is where the exchange rate is set. The tax flow has been moved one step along. So the uk importer doesn’t pay the tax (on the goods), the uk exporter does (on their staff). That changes the sterling flow across the boundary and shifts the exchange rate. Quite where it settles between importers paying more and exporters receiving more is market/productivity determined.