I noticed the pound bombing more than usual and wondered what had changed since the end of last week when all the talk of an election seemed to be improving the outlook, then wham, all week it's been getting panned.
Mervyn King of the BoE has spoken to the meeja and stated that he will be printing more money, like many other gash 3rd world countries are wont to do!
I dont think we will see the pound go up until we get rid of the madmen running the cuntry (sic)
Good Times piece:
Sterling sinks as King talks of releasing more money
Sterling fell sharply on foreign exchanges yesterday after Mervyn King, the Governor of the Bank of England, warned again that it may be necessary to extend the Bankâs asset purchase programme.
The pound lost more than a cent against the US dollar in only ten minutes after Mr King told the Treasury Select Committee that the Bank was âready to do whatever seems appropriateâ.
The Governor said that he was particularly concerned by developments in the world economy, especially in the eurozone, Britainâs biggest trading partner. Asked by MPs if this meant that an extension of the Bankâs asset purchase scheme â also referred to as quantitative easing â would be needed, the Governor replied: âIt may be. Weâll have to see how things pan out. My particular concerns at present derive from the state of the world economy. Recovery in our largest export market â the euro area â appears to have stalled.â
Sterling fell sharply, from $1.5529 at 9.13am â just before he began speaking â to $1.5398 at 10.30am, when he finished giving evidence to MPs.
Jeremy Cook, chief economist at World First, the currency exchange broker, said: âMervyn Kingâs constant assertion that we may see further quantitative easing later in the year is acting like a dead weight around sterlingâs neck at the moment.
âThis, alongside concerns over our fiscal deficit heading into the election and how we are best to deal with it, will leave the pound unloved in the short term.â
Against the euro, the pound fell from â¬1.1406 to â¬1.1317, meaning that â¬1 buys 88.23 pence â the single currencyâs strongest level against sterling for almost two weeks.
In his last appearance before MPs before the general election, Mr King sidestepped questions over when action should be taken to reduce the UKâs public sector deficit, one of the big divisions between Labour and the Conservatives. He told MPs: âI honestly think that much of this debate is being overblown, because even if you announce a programme â to the extent that a significant part of the fiscal consolidation will come from measures or adjustments to public spending â it is very difficult to make those changes to take effect immediately.â
Mr King also played down similarities between Britain and Greece, a comparison drawn recently by David Cameron, the Tory leader, insisting that he would be âimmensely surprisedâ if the UK were to lose its triple-A credit rating.
The Governor said that the ratings agencies were looking for a âdetailed explanationâ of how Britain intended to reduce its budget deficit, but he warned: âYou certainly canât eliminate the deficit in one year. There has to be a programme announced that will start and continue right through the lifetime of the next parliament.â