And Paul Krugman thinks that is a very good thing:
A quick note on Britain: Paul Krugman Blog: The Darling budget is basically a confession that Britain doesn’t dare do any significant discretionary fiscal stimulus. But it should be pointed out that Britain is getting a serious monetary expansion — much more than other troubled European economies.... Britain has, despite worries about its budget, managed to cut rates significantly vis-a-vis the core eurozone countries... the fall in the pound has made British products a lot more competitive.
I think the Spanish comparison is instructive. Like Britain, it’s had a major housing bust. But Spain has basically had nothing happen to offset that shock.
So I’m actually fairly hopeful about Britain; right now, the fact that it’s not on the euro is serving it well.