At 15% physically smaller than its paper predecessor, the new tenner is like a physical manifestation of its reduced international purchasing power after the 'great Brexit devaluation'.
Today sees the launch of a new, plastic, £10 note. Secured with anti-forgery measures and emblazoned with Jane Austin, it is both more practical and marks a welcome end to the male monopoly on our pounds.
But the new note also comes in at 15% physically smaller than its paper predecessors, like a physical manifestation of its reduced international purchasing power thanks to the great Brexit devaluation. A 16% fall in the pound has made today’s tenner worth just £8.60 compared to its pre-referendum version.
The devaluation is a reflection of the diminishing confidence of market forces in the UK’s future – a direct impact of Brexit.
Investors and foreign exchange experts alike think that demand for the pound will be lower than expected if we leave the EU: there will be less inward investment, slower growth in trade and lower economic growth (and so lower interest rates) than if we were to stay in the EU. Less demand for Sterling means a lower price on the markets.
The knock-on effect on the economy as a whole has been apparent for many months through an accelerated rate of inflation. This week’s shock rise to 2.9% means prices are rising much faster than wages. While we have not yet left the EU, Brexit is already making millions of ordinary families worse off.
The squeeze has been felt by anyone who has taken a foreign holiday this summer, especially if they changed money at an airport, where many travellers were being offered less than a euro in exchange for a pound.
But the big issue is not the impact on a fortnight in the sun. If we lock in the Brexit devaluation then our armed forces and the NHS – perhaps the two biggest public sector spenders in the international market – will be paying for it for years to come.
The MoD’s spend is principally in dollars and the NHS is a big buyer in Europe – both face the same problem of budgets eaten into by the shrinking external value of the pound.
This could mean we are left with just the initial, and already ordered, 48 of the 138 jets the new aircraft carriers are meant to have.
For the NHS the estimated annual cost of the Brexit devaluation has already reached £900 million: the equivalent of scrapping over 100,000 IVF cycles or as many as 4.5 million hospital outpatient appointments
In other words, Brexit is no answer to austerity and is already making things worse. It is making the cap on public sector pay an ever tighter fit and it is screwing down on the real incomes of millions of people. Thinking again about Brexit is about strengthening our public services and fighting poverty.
Labour has a chance to build on its decision to support extended single market membership by emphasising that we need both a meaningful vote on the Brexit deal and to keep all the options – including an exit from Brexit – open.
Every time we slide closer to a chaotic Brexit – especially every time some minister seeks to burnish their credentials with the small number of hardcore Brexiteers on the Tory backbenches – the pound comes under ever greater pressure. Conversely even a small move owards stability has the opposite effect.
The logic all points in one direction: the more we can demonstrate that we will approach our continuing relationship with the EU on the basis of pragmatic national self-interest and not ideological fervour, the more likely it is that the pound will end its slide and instead strengthen – and that means leaving all options on the table while we still have time to change our minds.
A stronger pound is about more than a symbol of economic strength: it will have real benefits for families who have endured the longest squeeze on living standards in recent history.
If we want to protect our public services, if we want to end the squeeze on public sector pay, if we want to show that our country has not taken leave of its senses, then a simple and cost-free thing to say is that we will keep all options on the table before that option is taken away, because no Brexit is better than a bad Brexit, and building on our relationship within the EU might actually lead to the best possible outcome for the people of this country.
Eloise Todd is the CEO of Best for Britain. She tweets here.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.
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