Senior UK politician warns of run on the pound

[ZingPao]

LONDON (AP) -- Britain's government risks seeing the price of its currency collapse unless public borrowing is kept under control, one of the county's senior opposition politicians said Saturday.

Conservative lawmaker George Osborne told a British newspaper there could be a run on the pound sterling if the country's debt kept growing.

"We are in danger, if the government is not careful, of having a proper sterling collapse, a run on the pound," he was quoted as saying in the Times of London newspaper Saturday. "The more you borrow as a government the more you have to sell that debt and the less attractive your currency seems."

British Prime Minister Gordon Brown, in Washington for an economic summit intended to relaunch the crippled global financial system, said he regretted what he called "partisan talk."

"I believe that at a time when nations are coming together all over the world to deal with these problems, I think people are looking to politicians to be responsible and to show leadership," Brown said. He had no apologies for his government's plan to extend borrowing to jump-start Britain's faltering economy, saying the country's central bank backed his move.

"The governor of the Bank of England has made it absolutely clear that it is not only right to cut interest rates, but it is perfectly reasonable to have a fiscal stimulus," Brown said.

The pound fell to a six-and-a-half year low against the dollar and a record low against the euro this week amid mounting fears that Britain could be in for a long and deep recession -- and market rumors that the Bank of England could eventually cut interest rates to as low as 1 percent.

The government has stated that it will increase government spending in an effort to push back against the looming recession, and suggested it would drop a decade-old fiscal rule that public spending cannot exceed tax revenue over the course of a complete economic cycle.

British treasury chief Alistair Darling has said that strictly following the rules on borrowing would be perverse during a downturn, but Osborne, Darling's opposition counterpart in Parliament, condemned the move.

"The public is very concerned about how much money is being racked up on the country's credit card," Osborne told the Times. "They know you can't just borrow your way out of debt."

Associated Press Writer David Stringer in Washington contributed to this report.

http://biz.yahoo.com/ap/081115/brita...g_warning.html

Personally, I'm looking forward to all currencies failing. Let's just get it over with. Z

Personally, I'm looking forward to all currencies failing. Let's just get it over with.

Amen.

Yeh lets have a dole party.