There is clearly a lot to worry about with respect to the UK economy. Inflation is very high and has been high for the last two or three years as evidenced by all the letters the Governor of the Bank of England has written to the Chancellor explaining this above target inflation. Our fiscal deficit is one of the largest in Europe at about 12 or 13 per cent of GDP. House prices have almost regained their peak from '07 in certain parts of the country where they're regarded as very much in bubble like territory. On top of that we face a prolonged difficult period of fiscal austerity.

So against that backdrop one has to wonder is GBP attractive or should we be once again short this currency. Well the answer to that, from our point of view, is the case for shorting has indeed passed and the case for buying is building. The reason we say the case for shorting has passed is because it's all in the price. If you look at GBP on a trade weighted index analysis, we're at the bottom of our 40, 50 year lows. We're as low as we were in the mid '70s after the IMF crisis and we really haven't been lower at any time over that period.

Indeed, if you look at GBP against USD we're a little above 1.40 and only once in that time period has it been below that level.

If you look at GBP/EUR, 12 months ago sterling was at record lows. Since then, there has been a bit of a rally, but it's still very low levels.

So the case for shorting has passed. The bad news is in the price and the case for buying is building and that's based on three things.

Firstly, we have a new government, that seems intent on dealing with our economic problems. Intent on moving us from being a government spending driven and government job creation driven economy, which we have been for the past 10 years, to one that is driven by the private sector, by investment innovation and private sector job creation.

Secondly, we have a government that believes in sound money, protecting the purchasing power of GBP, which means an end to quantitative easing, which means a more serious attempt to address above target inflation, which means on average, over the long-term, slightly higher interest rates, thereby supporting sterling.

And finally, we have a very dynamic and flexible economy in the UK. We've seen that with the way labour markets have behaved in this last recession. We've also seen that in the way innovation plays out in the UK economy. It's flexible. It's not rigid. Its ability to regenerate itself is strong, particularly when you compare it to our major trading partner Europe.

So despite the fiscal austerity that is coming to Britain on June 22nd when the Chancellor announces his budget, for all those reasons above, the case for shorting has passed. The currency is cheap and the case for buying sterling is growing and strong.

That was the Longview. You can download this programme from the iTunes store, from Cantos' or indeed from our website, www.longvieweconomics.com. Do get in touch if you have any questions. We hope you've enjoyed watching and look forward to seeing you next month. Goodbye.