As I trundled my wheelie bin of papers and reports from one marble monument to EU pretentiousness to another I detected that Draghi the Deliverer has boosted Europe's flagging self confidence by getting the Germans to agree ( through gritted teeth ) to his big programme of Quantitative Easing. Sixty billion Euros a month until September 2016 which is rather like giving a kid a million quid to buy the sweet shop.
My guess is that it will work and boost even the weakest economies like Greece. But not us, because it could begin a war of currency devaluations. To make national economies more competitive and that's something Britain is very bad at because the pound is our phallic symbol and we're proud when it's hard but filled with post imperial triste if it softens.
The intention is not only to check deflation but to bring the Euro (which is already falling) down to a still more competitive level. Keeping their exchange rate down to boost exports stops their enormous trade surplus from pushing it up. It has always been a central object of German policy and the Euro helped them to do this. Not now, as their economy stalls, because Southern Europe can't afford to buy the BMWs and Mercs because of the austerity the Euro has imposed on them. So they need to sell more to the rest of the world and a fall in the exchange rate is the best way of doing this.
Which will hit us, making our exports to the EU less competitive and facing us with tougher competition in other markets. It will hit far eastern economies too, so expect turbulent times and more devaluations. But not from us. Our government (whichever it is) will announce that the pound is high because people have so much confidence in Britain.
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