The surge in our currency this week to a five-month high against the United States dollar and a record high against the euro highlights how we are losing in a race to the bottom.
Britain, Europe and the United States are determined to print more money to devalue their currencies to protect their own economies.
US Federal Reserve chairman Ben Bernanke vowed to keep US interest rates at zero per cent until the end of 2014, a full year longer than previously indicated. Even now talk is emerging from within his own monetary policy-making committee of the need for a third round of money printing later this year.
The European Central Bank is now widely expected to lend another €1 trillion to its banks on February 29 to calm financial markets and bolster Europe's battered banking system.
Much of that money is being recycled into European government bonds and is even being squirted into currencies such as ours in the form of buying covered bonds being issued by our banks. This is a massive injection of cash printed out of the ether and pumped into the European economy.