As someone who lives in the UK why is Sterling generally stronger than many other, more widley used currencies like the Euro or Dollar?

Question

As someone who lives in the UK why is Sterling generally stronger than many other, more widley used currencies like the Euro or Dollar?

In: 0

Answer 1

It’s not stronger, they just cut up their economy into fewer slices.

Imagine two large pizzas… one cut into 8 slices, one cut into 6 slices. Each slice of the pizza cut into 6 slices is bigger, but that’s not an indication of it being from a larger pizza.

Same thing with currency. Each Pound represents a fraction of the UK economy, and they could double the number of Pounds in circulation and cut the value in half, but that wouldn’t affect the strength of the economy because the total value is the same, just more “slices.”