Weighing British Emotion Versus British Reality
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Today we separate the emotion behind Scotland's independence vote from the reality underpinning Britain's economy.
Starting with emotion, the British pound has fallen 4.5 percent since June 30, nearly as much as the beleaguered euro.
The British pound has fallen even as economic indicators have improved. Since June 30, the Citigroup U.K. Economic Surprise Index has risen from near a 13-month low to a 3-month high. By contrast, Citigroup's euro zone equivalent still hovers near a 15-month low. In other words, U.K. data has generally surpassed economists' forecast; euro zone data has not.