The young ministers were now in favour of devaluation of the Pound Sterling, currently at $4.03. Jay lunched with Gaitskell on 20 July 1949, and they agreed that this would help to reverse the drain of capital out of the UK, that the USA was unlikely to help with further loans or gifts of dollars, that Commonwealth countries needed to be encouraged to buy British goods rather than goods priced in dollars, that there was potential to increase exports to dollar areas, and that if nothing was done there was a risk of reserves running low and a collapse in sterling putting the UK at the mercy of the USA. On 21 July Gaitskell, Jay and Wilson met the Prime Minister to tell him that devaluation was inevitable as reserves were still dropping. On 29 July, the Cabinet agreed in principle to devalue, having also been given the same advice in another memo from senior civil servants, Sir Edward Bridges (Permanent Secretary to the Treasury) and the two Treasury Second Secretaries (Robert Hall and Sir Edwin Plowden).