Why sterling is so cheap
I sat next to an Australian cattle farmer at a dinner a few weeks ago. He was thrilled with Britain, in particular with the price of our farmland. Why? “It’s just so cheap”. That may sound odd to a British-based farmer. An acre of good-quality arable land will set you back a good £8,000 these days. That’s a rise of nearly 200% over a decade, a return that is out of whack with almost everything else – even prime London property is only up 100% in the last ten years.
But we think land is expensive because we look at it in sterling. My new farming friend looks at it in Australian dollars. And the Aussie dollar is up nearly 60% against the pound in the last five years alone. That bears repeating. You can buy 60% more pounds per dollar today than you could in 2007.
And it isn’t just Australians who might think British stuff looks like something of a deal in their own currencies. The Japanese yen is up 87% against the pound over the same time period. The Singapore dollar is up 59%; the Brunei dollar 53%; the Canadian dollar 46%; the New Zealand dollar 43%; the Thai baht 42%; the euro 23%; and the US dollar 21%.
• Read the full editor’s letter here: Why sterling is so cheap.