So the debate goes on. For defenders of sterling - and the Swedish and Norwegian crowns -- the precipitous slide against the euro over recent months is broadly a boon, unless you work in the travel industry, or ski a lot. It acts as a shock absorber at a crucial moment, helping to cushion the economy against debt deflation.
Export profits may hold up long enough to give a lifeline to UK manufacturing and service firms as banks shut off credit lines. It is the difference between survival and failure for thousands of healthy companies. This is what an independent currency is for. It preserved social stability in 1931 when Britain left the Gold Standard, and again in 1992 on leaving the ERM (from which the pound later roared back to a higher level, at the appropriate time).
That's certainly the view that I take. There has to be flexibility in an economy and it's a great deal better that this flexibility be in the exchange rate and interest rates than it is in nominal wages and prices. Because trying to get flexibility in nominal wages and prices is almost impossible.