When markets violently move against Gordon Brown and undermine his carefully planned policy positions, he has shown no hesitation in kicking City spivs.
When he was caught on the wrong side of the ERM debate (Mr Brown enforced an unpopular anti-devaluation line within the shadow cabinet), he took a swipe at the “handful of shirt-sleeved speculators” who brought down the pound. His answer to the “global economic problem”? Some “new international institutions” to keep the wicked speculators in check.* Read more
There was an unmissable letter in this morning’s FT:
“Mr McCain also promises a ‘fix’. What does that mean? Deleveraging? Unwinding? All those using these scholarly-sounding phrases should take a cup of tea, stir a spoon of milk into it for several seconds, and then try to regain the pure milk…If they succeed, maybe they have found the trick for unwinding.” (Wolfgang Sendler, Trier University) Read more
Here is Chris Giles‘ shrewd take on the Bank’s analysis of the dramatic fall in sterling. The MPC came to no conclusion over the cause, but it certainly did not rule out chronic indecision at the heart of government.
An increasing number of economists think sterling’s decline represents a global lack of confidence in Britain and its paralysed policymakers rather than a beneficial move to changed economic or interest rate expectations. Read more