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Darling Should Worry as Pound Free Falls

Value of pound falls to 28-year low - Telegraph
Bank of England figures, which measure sterling against a basket of international currencies, recorded the pound at its weakest level since records began in 1980.

The pound has fallen amid growing fears over rapidly increasing levels of Government borrowing. Alistair Darling, the Chancellor, recently conceded that public borrowing will reach more than £1 trillion over the next few years.

Sterling is also not seen to be as strong as "global" currencies such as the dollar and euro during the economic downturn. The Conservatives have released figures showing that British Government debt is now considerably less creditworthy than that issued by the McDonalds chain of fast-food restaurants.

Peter Spencer, chief economic adviser to the Ernst & Young ITEM club, said: "You need a strong economy for a strong currency and there's no strength in the UK economy.

And so spoke the markets, people who actually bet on the future say the UK is a basket case. And because the pound is falling relative to other currencies it means it is judged to be have worse prospects than other currencies. So much for Gordon's "saving the world" or leading it out of trouble, the smart money is all jumping into other lifeboats rather than trust the Great Helmsman.

Comments

I'm not being funny but "when records began in 1980" - fuck! Can't anyone remember what the pound:dollar ratio was in 1979??????? When records began! Fuck!

I seem to recall there was a happier time when it was US$4: £1

Still there is an upside - looking at the £:ECU rate, none of us can go to Yurp this summer

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