Osborne: Brown's borrowing risks run on the pound
Sterling has fallen by a huge amount as it is! http://www.guardian.co.uk/business/2008/nov/15/interest-rates-brown-g20
Sterling has fallen by a huge amount as it is! http://www.guardian.co.uk/business/2008/nov/15/interest-rates-brown-g20
George Osborne, the shadow chancellor, launched a new assault on Gordon Brown's economic policy last night, saying his profligate borrowing could provoke a run on sterling, or require a rise in interest rates that would plunge Britain deeper into recession. Osborne said: "Sterling has devalued rapidly against the euro and the dollar. We are in danger, if the government is not careful, of having a proper sterling collapse, a run on the pound. The danger of a run on the pound is that it pushes up long-term interest rates, which is a huge burden on the economy. The more you borrow as a government and the more you have to sell the debt, the less attractive your currency seems." Osborne's comments came as Brown arrived in Washington for a crisis meeting of the G20 after pledging that lower interest rates, tax breaks for the low-paid and measures to make the economy greener would be at the centre of Britain's response to the global recession. The remarks expose a clear dividing line developing between Brown, who is calling for unfunded extra borrowing to boost the economy, and Osborne, who believes borrowing has reached dangerous levels. But the shadow chancellor risks accusations of provoking a run on the pound himself, or of making a false prediction if sterling recovers in the markets in the months to come.