The effect of devaluation
The pound has been falling against the euro throughout the millennium.
This means that it’s becoming less and less attractive for foreigners to work here, and more and more attractive for British people to emigrate to the continent.
To show the effect, I’ve taken a hypothetical worker, earning £21k in the UK eight years ago, and the equivalent, €35k in the Eurozone. I’ve then increased the salary by 3% each year:
| Year | Exch. rate | Worker in the UK | Worker in Eurozone | Percentage | ||
|---|---|---|---|---|---|---|
| 2000 | 0.60 | £21000 | €35000 | £21000 | €35000 | 100% |
| 2001 | 0.62 | £21630 | €34887 | £22351 | €36050 | 97% |
| 2002 | 0.64 | £22279 | €34811 | £23764 | €37132 | 94% |
| 2003 | 0.70 | £22947 | €32782 | £26772 | €38245 | 86% |
| 2004 | 0.70 | £23636 | €33765 | £27575 | €39393 | 86% |
| 2005 | 0.69 | £24345 | €35282 | £27996 | €40575 | 87% |
| 2006 | 0.68 | £25075 | €36875 | £28418 | €41792 | 88% |
| 2007 | 0.71 | £25827 | €36377 | £30562 | €43046 | 85% |
| 2008 | 0.84 | £26602 | €31669 | £37243 | €44337 | 71% |
This is a dramatic change. In other words, seen from the continent, British people are now earning only 71% of what they did eight years ago.