On a recent trip to New York City, a Times economics reporter based in London felt the immediate impact of the pound’s drop and U.S. inflation.
A few weeks ago, the British pound went on a wild ride.
In late September, when Liz Truss was just a couple of weeks into her short and turbulent tenure as Britain’s prime minister, she and her finance minister announced widespread tax cuts on top of an expensive pledge to freeze energy bills for two years. It’s an understatement to say that financial markets weren’t impressed.
As the pound plunged to its lowest-ever level against the dollar on Sept. 26, to $1.035, I watched with more than professional interest. In just four days’ time, I was traveling to New York to visit The New York Times’s newsroom for the first time in nearly three years.
As an economics and business reporter based in The Times’s London bureau, I was writing about the pound’s tumble and thinking about how it was a reflection of the diminishing international confidence in British policymaking; how it would increase the costs of imports for companies; and, if the weakness was sustained, how it would worsen Britain’s already stark inflation problem.
But these are relatively slow-moving consequences of a currency’s decline. By going abroad, I would be confronting the immediate impact of the pound’s drop. It goes without saying that New York is an expensive city, but I was visiting it when the pounds in my pocket had never been worth less, and when inflation in the United States was running at the fastest pace since the early 1980s.
Growing up in Britain, I remember family and friends would visit New York and bring back clothes, sneakers and other goodies, embracing a much more favorable exchange rate. Now, the goal was to spend as little as possible. Earlier in the summer, I had read my colleague Nicole Hong’s article about food inflation in New York and became slack-jawed at the prospect of $15 French fries.
By the time I landed on Sept. 30, the pound had recovered somewhat. It was at about $1.13, a level last seen in the mid-1980s. Nearly a decade of writing about the pound has taught me that this recovery wasn’t much to get excited about. The British government had eroded the confidence of international investors, and analysts expected the pound to become even weaker.
In Britain, as in the United States and in Europe, prices are rising at the fastest pace in decades. I’m becoming accustomed to experiencing sticker shock, but the added effect of the exchange rate — say, on my jet-lagged takeout dinner — was enough for a double take.
The weakness of Britain’s currency influenced every spending decision I made during my week in New York City. I walked in a coffee shop, and then right back out when I saw that it was selling $7 coffees, enough for two cups at a similar shop in central London. I squirmed as I paid nearly $5 for two bottles of water at a 7-Eleven. Suddenly, a cheap slice of pizza was more appealing than a meal at a nice restaurant.
At some point, though, one of my travel philosophies kicked in: When you are somewhere expensive, sometimes it’s worth it to give in a little and enjoy yourself. This is what I told myself at Maison Pickle on the Upper West Side, where plate after plate of 24-layer cake was carried out of the kitchen and past my table. I ordered a slice of the confetti variety, stuffed with rainbow sprinkles, without even asking how much it was. ($15, it turned out.)
What struck me walking around Manhattan was that many tourists must have been experiencing the same thing that I was: the downside of the strong dollar.
Often when the dollar is strong, journalists think about stories of Americans making cheap trips to Europe. But my trip to New York made me think about everyone going in the other direction. What makes them travel to an expensive city at such a costly moment?
It’s another way to think about a central question that has been at the top of my mind recently when reporting on inflation: How will people react to high prices after a pandemic that restricted so much activity, like eating out and travel, for years?
No one is certain of the answer, but economists and executives are all working out their best guesses. For me in New York, that meant savoring a memorable moment — confetti cake! — and looking for other ways to make cuts.
Bagikan Berita Ini
0 Response to "Currencies, Costs and Confetti Cake - The New York Times"
Post a Comment