Since then the pound has never regained its 1967 level of $2.80. The pound tumbled to $1.15 last week, its lowest level since those heady days of 1985. The dollar rose against the British pound, with sterling slipping to $1.4005 in London, from $1.4077 Thursday. These problems culminated in the devaluation of the pound under the Harold Wilson government in 1967. In many ways, this was expected. Devaluation is the deliberate downward adjustment to the value of a country's currency relative to another currency, group of currencies, or standard. The collapse of the Bretton Woods system in 1971 led to the pound floating on international markets. Subsequently, Harold Wilson resigned and James Callaghan took over as Prime Minister. In times of crisis, people rush to the familiar and the safe. British Pound Devaluation Delusions "It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued." In a broadcast to the nation the following day, Wilson said, "Devaluation does not mean that the value of the pound in the pocket in the hands of the … British housewife … is cut correspondingly. 1967: Wilson defends 'pound in your pocket' The Prime Minister, Harold Wilson, has defended his decision to devalue the pound saying it will tackle the "root cause" of Britain's economic problems. Filed under Business & the Economy , Issue 32 , Politics On November 4th 1988 the value of the Tanzanian shilling was reduced from Shs 98 to Shs 120 to the dollar or about Shs 220 to the pound and further creeping downward adjustment was envisaged in subsequent months down to the end of the financial year in June 1989. Following the War, as part of the Bretton Woods system, the pound was briefly fixed at $4.03 per £1 until 1949 when it was devalued by 30% to $2.80. At the end of last week, the pound stood at $1.3892. By 1972 Britain's position in the world monetary system had substantially changed. The government announced last night it was lowering the exchange rate so the pound is now worth $2.40, down from $2.80, a cut of just over 14%. The pound tumbled to $1.15 last week, its lowest level since those heady days of 1985. Markets Pound devaluation: how the lessons of 1967 apply today. The UK actively devalued its currency in 1967, but the 20% fall in the pound since the Brexit vote continues a long-term trend of devaluation.
How the devaluation of the pound has affected British business – for better and for worse Save The pound fell below the symbolic $1.20 mark against … Around this time, investors became convinced that the pound was overvalued and that the government might devalue. Download this publication The EGP Devaluation: A new beginning On the morning of 3 November 2016, after mounting pressures, the Central Bank of Egypt (CBE) announced in a surprise move that it had fully floated the Egyptian pound (EGP). To those who took part in it, the devaluation of sterling in September 1949, from $4.03 to $2.80 to the pound, was one of the most dramatic episodes in the post-war history of the United Kindom. In 1971 the US President, Richard Nixon , had made the dollar inconvertible into gold, effectively ending the Bretton Woods system and Britain was due to enter the EEC at the beginning of 1973. Historically, early currencies were typically coins struck from gold or silver by an issuing authority which certified the weight and purity of the precious metal. The exchange rate was set too high given Britain's war-torn economy (four dollars to the pound! In 1949, the UK entered the Bretton Woods system, which fixed the pound's exchange rate against the dollar, which in turn was linked to gold. This came … By the summer of 1966, the pressure on sterling was acute but Wilson was determined to resist devaluation. Coronavirus: Why the pound is taking a pummelling as crisis deepens Sky's Ian King explains why he sees a runaway train threat to sterling as … The pound began the 1980s worth $2.30, but by early 1985 it touched a record low of $1.05. After failing to secure a bail-out from the Americans or the French, a devaluation from US$2.80 to US$2.40 took effect on 18 November 1967. In many ways, this was expected. It seemed likely at the time that it would also prove one of the most important in terms of its effects. The left wing of the Labour Party defeated the Public Expenditure White Paper in the Commons in March 1976. Devaluation of the pound.
In times of crisis, people rush to the familiar and the safe. Devaluation is most often used in a situation where a currency has a defined value relative to the baseline.