Sinking Pound, Sinking Brown

On Ladbrokes you can get 40/1 on Jack Straw being Prime Minister by the end of this year. I reckon that is a pretty good bet. The pound is sinking like a stone, and the markets have turned negative on the UK economy. It doesn't look like Gordon Brown understands just how dependent on foreign cpaital the British economy, or indeed his own government, has become. And who wants to lend money in a currency that is collapsing?

In my Bloomberg column at the start of the year one of my predictions for 2009 was that Britain would have to call in the IMF to bail it out. I was, to some degree, kidding around. Now it is looking more and more likely all the time.

If it happened, I don't think Brown could stand the humiliation. He'd have to resign as part of the rescue package. In those circumstances, Jack Straw would be the most likely person to takeover as a caretaker Prime Minister, holding the fort until an election the following spring. So, in effect, the bet is 40/1 against the UK going bust. Those odds look too generous to me. After all, the figures say we are.