Fraser Nelson

The markets tremble

The markets tremble
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How's this for a frank assessment of the UK economy? "I would urge you to sell any sterling you might have. It’s finished. I hate to say it, but I would not put any money in the UK”. It's by Jim Rogers, who co-founded the Quantum Fund with George Soros. The markets agree with him - the pound is, again, off between 2% and 3% against major currencies (for the latest, click here).

The market is beginning to get a handle on the sheer extent of the damage of Brown's policies - and, crucially, his inept banking regulation. UK banks (in particular, RBS) lent aggressively to everyone from dodgy Russians to leveraged buy-outs. Given that bank debts amount to 350% of GDP, the potential for calamity is clear. The taxpayer is absorbing banking losses, on an apparently open-ended promise. As I blogged yesterday, the government may say its going to bail out the banks but who will bail out the government? There is no clear answer. And this is what Rogers is talking about. The market thinks that - as George W Bush put it - "this sucker's going down".

Written byFraser Nelson

Fraser Nelson is the editor of The Spectator. He is also a columnist with The Daily Telegraph, a member of the advisory board of the Centre for Social Justice and the Centre for Policy Studies.

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