Wednesday, 12 November 2008
The Flight From Sterling
Te flight from sterling is accelerating, with the pound down to new lows against the dollar, and record lows against the euro. Now there are signs of a sell-off in the gilts market as well. The idea that the UK government is going to be able to painlessly raise £100 billion in borrowing to spend its way out of recession is laughable. The bond and currency markets will expose that, particularly with Gordon Brown intent on making his fiscal irresponsibility into a virtue. It's always a sterling crisis that is the undoing of a Labour Government. This one doesn't look like being any different.