This page was last edited at 1415 GMT London Monday 27 October 2008
KHOODEELAAR! 'updated' response to Gordon Brown's appearance at the Imperial College London morning [Monday 27 October 2008]:
THE INTRODUCTION:
NO, Gordon! You are wrong. You are wrong to abuse the ‘financial crisis’ as a pretext to peddle through the wasteful acton in funding Big business... your speech at the Imperial College has been another one full of factual, evidential, analytical and intellectual contradictions..... The fact that there is no competent parliamentary or democratic opposition in today's Britain does not mean that you will succeed in your ploy....
KHOODEELAAR! advice to you is: Drop Crossrail....
In this SERIES of comments on that appearance, we shall be going over all the key factors of your contradictions....
After Crossrail, you need to think again about what you are doing about ‘nuclear’.
You should not overdo the nuclear thing either. What you need to show is not this display of what clearly appears to be an insecure sub-academic propensity... Drop that as well. You have to show that YOU understand the world of economics as it must be understood. It is about people. For all your preacherman words and phrases, you appear quite detached from the core of economic thinking.... Get the people factor right... And then you will be able to see that preachery will not ‘correct’ the ‘crisis’.
CONDUCT will. ONLY Correct conduct will do that.
But you have to show that you are able and willing to yourself attach the priority to that yourself.
You said that you were soon off to Arabia again! Now, why would a man who boasts of ‘British vah-loos’ be off to Arabia so often?
Unless there was a mine to be exploited... A gold mine of money...
Now why would you not admit it then, Gordon! That that’s where the key answer lies....
You boast of the English language...
The British skills
The British vah-loos!
Did the bankers possess any of these skills, Gordon?
And did they make the morally right decisions?
And yet you have to travel so often to the Arabic land!
What that says is that the phrase global crisis’ is a sham. It is misleading. The phrase that you should ‘use’ is:
new imperialism and new colonialism........
That will deliver all the dosh that you need..
that is what your real plan is!
Looting under cover of a crisis... that is what it is all about...Isn’t it, Gordon...
THAT is where the money is going to come from!
Not the taxpayers!
Is that why the Tory Phillip Hammond was reluctant to oppose your utterances this morning?
[To be continued]
33rd year AADHIKAR
0225 GMT Thursday 06 June 2013
AADHIKAR Media Foundation Editor © Muhammad Haque
Founding News Editor
Shah M Azizul Haque
AADHIKAR Media Foundation established with the publication of AADHIKAR the weekly on Monday 19 December 1980 from London E1 UK.
Monday, October 27, 2008
Gordon Brown is heading for a real economic and fiscal disaster.... Unless he stops financing the looters of the finances [256]
This page was last edited at 0528 GMT London Monday 27 October 2008
http://news.bbc.co.uk/1/hi/uk_politics/7692403.stm
From The Times
October 27, 2008
Lawson boom, Brown boom, they all bust in the end
Gary Duncan: Economic view
It will be a bleak January before, technically, we have official verification of the new recession, when the GDP numbers for October to December confirm a second consecutive quarter of falling national income. Yet that can be seen as a fait accompli, with a further steep decline now an inevitability after the sharper than expected 0.5 per cent drop of the past three months.
The scale of that 0.5 per cent plunge in GDP, which came after the economy stagnated, with zero growth, in the second quarter, has magnified fears over the danger that the new recession will be at least as deep and protracted as that endured in the early Nineties, perhaps worse.
True, last week's news was far from as bad as the severe slump that heralded the last recession. Then, GDP abruptly collapsed by 1.2 per cent in the third quarter of 1990, having risen by 0.5 per cent in the second quarter, and by 0.8 per cent in the first. Yet, the looming threat of a painful economic slump was spattered in red ink across Friday's data.
It remains possible that Britain will be able to escape the new recession becoming as vicious as that of the early Nineties. But last week's figures were bad enough to suggest that this will require both a large dose of luck, and some swift and well-judged action by the authorities. Indeed, the very real danger is that the economy could plunge on a scale similar to, or worse than, the still more brutal early Eighties recession.
Especially ominous were the dire straits of the services sector, accounting for three quarters of the economy, laid bare by Friday's figures. Services as a whole shrank by 0.4 per cent, its fastest pace of decline for 18 years, led by a 1.7per cent collapse in the consumer-dependent retail, wholesale, hotels and restaurants sector.
It seems very probable that the economy will now slide into a steep, consumer-driven downturn. With little to induce fretful consumers to stop their retreat from shops, incomes having endured a severe squeeze from soaring living costs offset by only modest pay rises, and credit remaining scarce and costly, a consumer bust to follow the consumer boom that, in reality, ended some time back, seems a certainty.
The National Institute of Economic and Social Research expects consumer spending will plummet by 3.4 per cent next year and that Britain is set to suffer the worst recession of any leading economy.
For Gordon Brown, savouring the revived poll ratings that have accompanied deserved plaudits for Britain's role in leading this month's rescues of the world's banks, this is a moment of substantial danger. As the economy wilts, the Prime Minister's revitalised standing will shrivel like autumn leaves. A catastrophic implosion of the global banking system may have been averted, along with the worldwide Depression that it would have triggered, but that will not prevent voters from blaming Mr Brown for the more modest economic calamity of a nasty recession.
The Conservatives' mockery of the Prime Minister's hubris in claiming to have banished “boom and bust” is understandable, and will no doubt score the Tories points. It is certainly true that the overhauled system of financial regulation put in place by Mr Brown in 1997 has been tested to near destruction and found badly wanting by the present crisis. It is true, too, that the Treasury and Bank of England might well have done more to rein in the headlong housing boom and the personal debt explosion that will now play their part in amplifying the bust we are about to suffer.
Yet the Tories might caution themselves that the Government's culpability for the new recession is relatively modest compared with their own responsibility for the previous one, which was the direct consequence of grave misjudgments by ministers.
Indeed, as Geoffrey Dicks, of RBS, points out in a new analysis, comparisons with the early Nineties recession are telling, offering some grounds for optimism, as well as gloom, as we ask whether things will be worse this time around.
As Mr Dicks sets out, the grounds for optimism are that, in many ways, Britain entered the last recession in a much worse state than now, thanks to a series of home-grown errors. In the late Eighties, the economy was allowed to embark on the runaway “Lawson Boom” in which consumer spending was, at one point, rising at an annual pace of 8 per cent. Inflation soared from 3 per cent in 1988 to more than 8 per cent, requiring interest rates to be doubled in 18 months to 15 per cent. The bust was then compounded by the catastrophic decision to join the European exchange-rate mechanism (ERM) at a hugely overvalued rate for the pound. This not only throttled manufacturing but conspired to keep interest rates at deadening levels even when recession took hold.
While there is much to be fearful about now, this time around matters are very different. Crucially, the inflation problem we have had is less potent, and rather than being home-grown emanates mainly from the past surge in world oil and food prices, which are now in sharp retreat. Nor does the Bank of England have its hands tied as it did in the early Nineties — it is free to cut interest rates sharply and has begun to do so.
There are, however, other vital threats to the outlook that were not present in the early Nineties. Critically, as Mr Dicks notes, the housing market is in a much more parlous state. House prices have plunged as much in the past 12months as they did in the whole of the last recession and mortgage approvals are also now down by more than in that episode thanks to the continued credit drought. At the same time, households have suffered a far more extreme squeeze on disposable income in the past three years, with almost no increase after tax and inflation. Amounts being saved have collapsed to about zero as a result — raising the acute risk that falls in consumer spending could be very sharp as recession leads Britons to rebuild their savings for the future.
These perils to economic prospects are heightened by the risk that, even if the Bank cuts official base rates, the beneficial effect will be dulled as financially strained banks continue to restrict lending and charge more for it, while consumers and companies remain reluctant to borrow.
All of this leads to the conclusion that decisive and aggressive action by the Bank is now both possible and essential, if severe recession is to be avoided. Fortunately, it also seems probable. If radical cuts in interest rates are now rapidly delivered, these, coupled with steep falls in the pound, and decisive fiscal measures from the Chancellor, can still save the economy from a disastrous slump.
gary.duncan@thetimes.co.uk
HAVE YOUR SAY
http://news.bbc.co.uk/1/hi/uk_politics/7692403.stm
From The Times
October 27, 2008
Lawson boom, Brown boom, they all bust in the end
Gary Duncan: Economic view
It will be a bleak January before, technically, we have official verification of the new recession, when the GDP numbers for October to December confirm a second consecutive quarter of falling national income. Yet that can be seen as a fait accompli, with a further steep decline now an inevitability after the sharper than expected 0.5 per cent drop of the past three months.
The scale of that 0.5 per cent plunge in GDP, which came after the economy stagnated, with zero growth, in the second quarter, has magnified fears over the danger that the new recession will be at least as deep and protracted as that endured in the early Nineties, perhaps worse.
True, last week's news was far from as bad as the severe slump that heralded the last recession. Then, GDP abruptly collapsed by 1.2 per cent in the third quarter of 1990, having risen by 0.5 per cent in the second quarter, and by 0.8 per cent in the first. Yet, the looming threat of a painful economic slump was spattered in red ink across Friday's data.
It remains possible that Britain will be able to escape the new recession becoming as vicious as that of the early Nineties. But last week's figures were bad enough to suggest that this will require both a large dose of luck, and some swift and well-judged action by the authorities. Indeed, the very real danger is that the economy could plunge on a scale similar to, or worse than, the still more brutal early Eighties recession.
Especially ominous were the dire straits of the services sector, accounting for three quarters of the economy, laid bare by Friday's figures. Services as a whole shrank by 0.4 per cent, its fastest pace of decline for 18 years, led by a 1.7per cent collapse in the consumer-dependent retail, wholesale, hotels and restaurants sector.
It seems very probable that the economy will now slide into a steep, consumer-driven downturn. With little to induce fretful consumers to stop their retreat from shops, incomes having endured a severe squeeze from soaring living costs offset by only modest pay rises, and credit remaining scarce and costly, a consumer bust to follow the consumer boom that, in reality, ended some time back, seems a certainty.
The National Institute of Economic and Social Research expects consumer spending will plummet by 3.4 per cent next year and that Britain is set to suffer the worst recession of any leading economy.
For Gordon Brown, savouring the revived poll ratings that have accompanied deserved plaudits for Britain's role in leading this month's rescues of the world's banks, this is a moment of substantial danger. As the economy wilts, the Prime Minister's revitalised standing will shrivel like autumn leaves. A catastrophic implosion of the global banking system may have been averted, along with the worldwide Depression that it would have triggered, but that will not prevent voters from blaming Mr Brown for the more modest economic calamity of a nasty recession.
The Conservatives' mockery of the Prime Minister's hubris in claiming to have banished “boom and bust” is understandable, and will no doubt score the Tories points. It is certainly true that the overhauled system of financial regulation put in place by Mr Brown in 1997 has been tested to near destruction and found badly wanting by the present crisis. It is true, too, that the Treasury and Bank of England might well have done more to rein in the headlong housing boom and the personal debt explosion that will now play their part in amplifying the bust we are about to suffer.
Yet the Tories might caution themselves that the Government's culpability for the new recession is relatively modest compared with their own responsibility for the previous one, which was the direct consequence of grave misjudgments by ministers.
Indeed, as Geoffrey Dicks, of RBS, points out in a new analysis, comparisons with the early Nineties recession are telling, offering some grounds for optimism, as well as gloom, as we ask whether things will be worse this time around.
As Mr Dicks sets out, the grounds for optimism are that, in many ways, Britain entered the last recession in a much worse state than now, thanks to a series of home-grown errors. In the late Eighties, the economy was allowed to embark on the runaway “Lawson Boom” in which consumer spending was, at one point, rising at an annual pace of 8 per cent. Inflation soared from 3 per cent in 1988 to more than 8 per cent, requiring interest rates to be doubled in 18 months to 15 per cent. The bust was then compounded by the catastrophic decision to join the European exchange-rate mechanism (ERM) at a hugely overvalued rate for the pound. This not only throttled manufacturing but conspired to keep interest rates at deadening levels even when recession took hold.
While there is much to be fearful about now, this time around matters are very different. Crucially, the inflation problem we have had is less potent, and rather than being home-grown emanates mainly from the past surge in world oil and food prices, which are now in sharp retreat. Nor does the Bank of England have its hands tied as it did in the early Nineties — it is free to cut interest rates sharply and has begun to do so.
There are, however, other vital threats to the outlook that were not present in the early Nineties. Critically, as Mr Dicks notes, the housing market is in a much more parlous state. House prices have plunged as much in the past 12months as they did in the whole of the last recession and mortgage approvals are also now down by more than in that episode thanks to the continued credit drought. At the same time, households have suffered a far more extreme squeeze on disposable income in the past three years, with almost no increase after tax and inflation. Amounts being saved have collapsed to about zero as a result — raising the acute risk that falls in consumer spending could be very sharp as recession leads Britons to rebuild their savings for the future.
These perils to economic prospects are heightened by the risk that, even if the Bank cuts official base rates, the beneficial effect will be dulled as financially strained banks continue to restrict lending and charge more for it, while consumers and companies remain reluctant to borrow.
All of this leads to the conclusion that decisive and aggressive action by the Bank is now both possible and essential, if severe recession is to be avoided. Fortunately, it also seems probable. If radical cuts in interest rates are now rapidly delivered, these, coupled with steep falls in the pound, and decisive fiscal measures from the Chancellor, can still save the economy from a disastrous slump.
gary.duncan@thetimes.co.uk
HAVE YOUR SAY
KHOODEELAAR! No to City of London LIES for Crossrail scam, as we exposed in Michael Snyder's role 3 years ago [255]
This page was last edited at 0510 GMT London Monday 27 October 2008:
"Monday, January 30, 2006
KHOODEELAAR ticks off City of London's Michael Snyder
KHOODEELAAR
KHOODEELAAR the Brick Lane London E1 area campaign against the Crossrail hole Bill
Dear Mr Snyder
Crossrail Bill
You have been quoted by Bloomberg internet news today as having stated the following
`` We hope the committee stage will not be too long, that the funding will be sorted soon, and the bill will be passed into law in the near future, because the City, and in fact the whole of London, needs Crossrail,'' [said Michael Snyder, chairman of policy and resources at City of London, which runs the financial district.]
KHOODEELAAR the Brick Lane London E1 area campaign against the Crossrail hole Bill is opposed to the provisions in that Bill for digging a hole and doing related damage and destruction to the area.
KHOODEELAAR is also opposed to your role so far in uttering falsehoods and fabricating scenarios that are not factual truthful or legitimate.
KHOODEELAAR has noticed that you are engaged in undermining what legitimate acceptability there still remains in the process of the UK House of Commons [and of Lords]
KHOODEELAAR is of the view that you are doing whatever you are and have been doing for the railroading of the Crassrail adventure because you are an agent for the forces that are bent on profit at any cost and profit at the cost of the public.
You must not carry on like that.
The Brick Lane London E1 area is not any less important as a community than any other in any part of the UK and your assumption that this community does not exist or that it is not worthy of being given the utmost and the fullest constitutional consideration by the UK Houses of Parliament is a dangerously antisocial and antidemocratic assumption.
Please review your role and adopt a democratic and legitimate one.
Please also abandon the habit of dressing up lies as being ‘truths’ under banners of the City of London or of the Corporation of London.
Your promotion of the lie that Crossrail project is good and that it is good notwithstanding the technical, the economic, the democratic, the environmental, the social discrimination and violations it contains and those it will inflict, shows that you are not bothered about democracy as much as you are bothered for profit for the few at the expense of the many.
Please desist from making any further false remarks and especially from making any further antisocial, anti-accountability comments for the Crossrail adventure.
Yours faithfully
KHOODEELAAR THE Brick Lane London E1 Area campaign against the Crossrail hole Bill 2006
1026 Hrs GMT
London Monday 30 January 2006
"Monday, January 30, 2006
KHOODEELAAR ticks off City of London's Michael Snyder
KHOODEELAAR
KHOODEELAAR the Brick Lane London E1 area campaign against the Crossrail hole Bill
Dear Mr Snyder
Crossrail Bill
You have been quoted by Bloomberg internet news today as having stated the following
`` We hope the committee stage will not be too long, that the funding will be sorted soon, and the bill will be passed into law in the near future, because the City, and in fact the whole of London, needs Crossrail,'' [said Michael Snyder, chairman of policy and resources at City of London, which runs the financial district.]
KHOODEELAAR the Brick Lane London E1 area campaign against the Crossrail hole Bill is opposed to the provisions in that Bill for digging a hole and doing related damage and destruction to the area.
KHOODEELAAR is also opposed to your role so far in uttering falsehoods and fabricating scenarios that are not factual truthful or legitimate.
KHOODEELAAR has noticed that you are engaged in undermining what legitimate acceptability there still remains in the process of the UK House of Commons [and of Lords]
KHOODEELAAR is of the view that you are doing whatever you are and have been doing for the railroading of the Crassrail adventure because you are an agent for the forces that are bent on profit at any cost and profit at the cost of the public.
You must not carry on like that.
The Brick Lane London E1 area is not any less important as a community than any other in any part of the UK and your assumption that this community does not exist or that it is not worthy of being given the utmost and the fullest constitutional consideration by the UK Houses of Parliament is a dangerously antisocial and antidemocratic assumption.
Please review your role and adopt a democratic and legitimate one.
Please also abandon the habit of dressing up lies as being ‘truths’ under banners of the City of London or of the Corporation of London.
Your promotion of the lie that Crossrail project is good and that it is good notwithstanding the technical, the economic, the democratic, the environmental, the social discrimination and violations it contains and those it will inflict, shows that you are not bothered about democracy as much as you are bothered for profit for the few at the expense of the many.
Please desist from making any further false remarks and especially from making any further antisocial, anti-accountability comments for the Crossrail adventure.
Yours faithfully
KHOODEELAAR THE Brick Lane London E1 Area campaign against the Crossrail hole Bill 2006
1026 Hrs GMT
London Monday 30 January 2006
KHOODEELAAR! No to 'Big Business Crossrail', updated advice to Boris Johnson: Stop irresponsibly peddling wasteful Crossrail [254]
This page was last edited at 0455 GMT London Monday 27 October 2008:
KHOODEELAAR! Editor©Muhammad Haque...
KHOODEELAAR! REMINDING Boris Johnson that there is NO EVIDENCE that ‘Crossrail’ is the priority transport need for the people of London. There is no evidence that even officially ‘cited’ experts on transport found any evidence to support the UK treasury incurring public debts to fund the Big Business -craved Crossrail.. There IS evidence that the public money which the touts of Big Business Crossrail scam want to put into the Big business pockets CAN and should be applied to already well and widely recognised transport needs in London....
Boris Johnson must show that he is a thoughtful, rational and responsible holder of the post that he now holds in the name of the people of London Boris Johnson must not confuse a craze that is being driven by Ken Livingstone and his ilk from the background with a considered, responsible and sustainable way forward. ‘Spending public money’ is NOT beyond the universally, objectively recognisable requirements of accountable office... What is even more important right now, spending any amount of public money will have ti be at the expense of cutting back on something even more urgent.... So before Boris Johnson gets too used to being ‘friends’ with the residual foot-soldiers and place men and place women from the regime of Ken Livingstone and assorted, fellow-travelling peddlers of corruption at the expense of the public, he [Boris Johnson] must think very seriously about the immediate effects on his own credibility...Boris Johnson cannot say he has not been warned about Crossrail and the City of London interests..... He has no need to act as a tout of these interests interests... Not only does that role contradict everything Boris Johnson aid in his ‘acceptance’ speech. It also shows that he is not adhering to the principle of telling the truth... Boris knows that everyone who has been watching him is aware of his record as a person who has told lies including a widely documented involvement in seeking to shield a convicted fraudster friend and in doing so, trying to have someone physically attacked...Not to speak of the many reported incidents o adultery and lying to his wife ...... The fact that he is now in office could change so dramatically if any of the as yet unpublicised incidents of Boris Johnson being dishiest, untruthful and immoral ... were to come out... So Boris Johnson has got to make sure that he does not lumber the public with £Billions od debts that can be avoided by listening to reason and dropping Crossrail.....Boris John must not confuse his ‘ability’ to make utterances with the actual entity. Integrity., Does Boris Johnson have integrity? And if he does have integrity, how does he show, in reality, that he has integrity? Integrity will not be substantiated if he is callous in his ‘use’ or misuse of the [powers that go with the post he holds He has not shown what evidence there is that Crossrail is the priority that London;’s transport needs demand.......He has not shown that the alternative spending priorities on Transport and on other aspects of London peoples’ lives are LESS important. Boris Johnson should take the KHOODEELAAR! advice, being repeated here because he has failed to pay attention on previous occasions. Shut up about Crossrail... You do NOT know the facts. Find the facts first. Find the evidence and then open your mouth on Crossrail. And when you do, do it rationally, thoughtfully. And truthfully and honestly. And responsibly Not as a crazy fanatic that is deranged with the egotistic insanity of power... That is what Livingstone did.....And another thing, read up on the leis that Livingstone uttered in talking up THE IMAGE of the City of London.....No rational holder of public office would do that.....[KHOODEELAAR! will return to the duties and the obligations o Boris Johnson in due course]
KHOODEELAAR! [below] quoting the following item about the confused state of Alistair Darling, from the web site of the London daily the INDEPENDENT Monday 27 October 2008.
"Darling under pressure to avert meltdown of sterling
By Alistair Dawber and Sean O'Grady
Monday, 27 October 2008
Related Articles
Further global rate cut likely, hints PM
IMF offers to bail out Ukraine with $16.5bn loan
Stephen King: Sometimes the economic beauty contest gets us into an ugly mess
Claire Fox: Not, please, in Marx's name...
Print Email
Search
Go
Independent.co.uk Web
Bookmark & Share
Digg It
del.icio.us
Facebook
Reddit
What are these?
Change font size: A A A
Alistair Darling will come under pressure this week to act to halt the dramatic slide in the value of the pound, which has tumbled to a six-year low against the dollar and all-time low against the euro.
The currency has taken a battering in the markets as investors have become increasingly nervous about the state of the UK economy, the Government's public spending plans and a widely anticipated programme of interest rate cuts by the Bank of England.
The Chancellor of the Exchequer, who is due to make a speech at City University in London on Wednesday evening, is expected to attempt to slow the fall of the pound, which slipped through the $1.60 mark on Thursday last week for the first time since 2003, by assuring the financial community that the Government has not abandoned its budgetary rules.
The pound closed at $1.59 on Friday, its lowest level for six years, and is also down to a record low against the euro, which appreciated to 83p last week.
Investors' nerves were not helped on Friday when the UK economy was shown to have contracted by 0.5 per cent in the last quarter, a bigger slowdown than expected, and after Gordon Brown and the Bank of England's Governor, Mervyn King, said that a recession, measured as two consecutive quarters of negative growth, was likely.
The markets are worried that the Monetary Policy Committee (MPC) of the Bank of England will be forced to rapidly cut interest rates in the coming months, starting at its next meeting on 6 November, to reflate the flagging economy. The consensus view among City economists is that the MPC will reduce rates by 0.75 percentage points. This, it is feared, will offer investors fewer incentives to hold the currency, leading to a more dramatic sell-off.
A number of analysts expect thatthe MPC will need to cut rates to just2 per cent by next year, a level that has not been seen in the UK since the 1950s.
It is not just falling interest rates that have put the pound under pressure. As the global economic downturn takes hold, investors are looking for what are traditionally considered to be safe havens, such as short-term US Treasury Bills, the Swiss franc and the yen.
The markets are also worried that as the economy enters a recessionary period the Government will be forced to increase borrowing, paid for largely by issuing government debt in the form of gilts. As the number of bonds floods the market, already saturated by securities from other countries attempting to raise money, so investors are worried that the Government will be forced to increase yields to attract buyers. Some also fear that the higher taxes needed to service the debt, which will soar as a result of the bank recapitalisation programme as well as the economic downturn, could hamper the MPC's ability to reduce base rates, slowing any economic recovery and, ironically, leading to inflationary pressure.
Ruth Lea, a former director of the Centre for Policy Studies and now economic adviser to the Arbuthnot Banking Group, said: "The worst case is that all this leads to a run on the pound: that is the meltdown scenario, and while I would not say it is a probability at this stage, it is certainly a possibility. Sterling has dropped rapidly in the last few days, and while some of that is due to investors rushing to the dollar, which is still the only currency people have to have, the speed of that drop is a concern. Given the amount of borrowing the Government has to do, there is a chance that foreigners will no longer be prepared to hold sterling, and if that happens, it is 1976 all over again and it is back to the IMF."
It is the rate of sterling's decline that has spooked the markets. The pound was worth nearly $2 earlier this year, with many now predicting that the pound could drop as low as the psychologically important $1.50. The currency has also devalued by more than 15 per cent in the last year against a trade-weighted basket of leading currencies.
The Treasury declined to comment on what Mr Darling would say this week, but it is understood that the Government will not take action to artificially stimulate sterling. The last time the UK actively supported the pound was in the early 1990s, when sterling was in the Exchange Rate Mechanism. Last Wednesday sterling fell 6.25 cents against the dollar, suffering its steepest fall since the aftermath of Black Wednesday in 1992, when the Major government had to abandon the ERM.
Instead, Mr Darling is likely to reassert the Government's commitment to its spending plans, saying that the Treasury will stick to its budgetary rules.
Many observers will be keen to see how far Mr Darling wants to go in bringing forward large public spending projects, such as Crossrail and the 2012 Olympics. The bailing out of the banks and reports that the Government will try to spend its way out of recession by using reflationary policies has undermined sterling, some analysts believe.
KHOODEELAAR! Editor©Muhammad Haque...
KHOODEELAAR! REMINDING Boris Johnson that there is NO EVIDENCE that ‘Crossrail’ is the priority transport need for the people of London. There is no evidence that even officially ‘cited’ experts on transport found any evidence to support the UK treasury incurring public debts to fund the Big Business -craved Crossrail.. There IS evidence that the public money which the touts of Big Business Crossrail scam want to put into the Big business pockets CAN and should be applied to already well and widely recognised transport needs in London....
Boris Johnson must show that he is a thoughtful, rational and responsible holder of the post that he now holds in the name of the people of London Boris Johnson must not confuse a craze that is being driven by Ken Livingstone and his ilk from the background with a considered, responsible and sustainable way forward. ‘Spending public money’ is NOT beyond the universally, objectively recognisable requirements of accountable office... What is even more important right now, spending any amount of public money will have ti be at the expense of cutting back on something even more urgent.... So before Boris Johnson gets too used to being ‘friends’ with the residual foot-soldiers and place men and place women from the regime of Ken Livingstone and assorted, fellow-travelling peddlers of corruption at the expense of the public, he [Boris Johnson] must think very seriously about the immediate effects on his own credibility...Boris Johnson cannot say he has not been warned about Crossrail and the City of London interests..... He has no need to act as a tout of these interests interests... Not only does that role contradict everything Boris Johnson aid in his ‘acceptance’ speech. It also shows that he is not adhering to the principle of telling the truth... Boris knows that everyone who has been watching him is aware of his record as a person who has told lies including a widely documented involvement in seeking to shield a convicted fraudster friend and in doing so, trying to have someone physically attacked...Not to speak of the many reported incidents o adultery and lying to his wife ...... The fact that he is now in office could change so dramatically if any of the as yet unpublicised incidents of Boris Johnson being dishiest, untruthful and immoral ... were to come out... So Boris Johnson has got to make sure that he does not lumber the public with £Billions od debts that can be avoided by listening to reason and dropping Crossrail.....Boris John must not confuse his ‘ability’ to make utterances with the actual entity. Integrity., Does Boris Johnson have integrity? And if he does have integrity, how does he show, in reality, that he has integrity? Integrity will not be substantiated if he is callous in his ‘use’ or misuse of the [powers that go with the post he holds He has not shown what evidence there is that Crossrail is the priority that London;’s transport needs demand.......He has not shown that the alternative spending priorities on Transport and on other aspects of London peoples’ lives are LESS important. Boris Johnson should take the KHOODEELAAR! advice, being repeated here because he has failed to pay attention on previous occasions. Shut up about Crossrail... You do NOT know the facts. Find the facts first. Find the evidence and then open your mouth on Crossrail. And when you do, do it rationally, thoughtfully. And truthfully and honestly. And responsibly Not as a crazy fanatic that is deranged with the egotistic insanity of power... That is what Livingstone did.....And another thing, read up on the leis that Livingstone uttered in talking up THE IMAGE of the City of London.....No rational holder of public office would do that.....[KHOODEELAAR! will return to the duties and the obligations o Boris Johnson in due course]
KHOODEELAAR! [below] quoting the following item about the confused state of Alistair Darling, from the web site of the London daily the INDEPENDENT Monday 27 October 2008.
"Darling under pressure to avert meltdown of sterling
By Alistair Dawber and Sean O'Grady
Monday, 27 October 2008
Related Articles
Further global rate cut likely, hints PM
IMF offers to bail out Ukraine with $16.5bn loan
Stephen King: Sometimes the economic beauty contest gets us into an ugly mess
Claire Fox: Not, please, in Marx's name...
Print Email
Search
Go
Independent.co.uk Web
Bookmark & Share
Digg It
del.icio.us
What are these?
Change font size: A A A
Alistair Darling will come under pressure this week to act to halt the dramatic slide in the value of the pound, which has tumbled to a six-year low against the dollar and all-time low against the euro.
The currency has taken a battering in the markets as investors have become increasingly nervous about the state of the UK economy, the Government's public spending plans and a widely anticipated programme of interest rate cuts by the Bank of England.
The Chancellor of the Exchequer, who is due to make a speech at City University in London on Wednesday evening, is expected to attempt to slow the fall of the pound, which slipped through the $1.60 mark on Thursday last week for the first time since 2003, by assuring the financial community that the Government has not abandoned its budgetary rules.
The pound closed at $1.59 on Friday, its lowest level for six years, and is also down to a record low against the euro, which appreciated to 83p last week.
Investors' nerves were not helped on Friday when the UK economy was shown to have contracted by 0.5 per cent in the last quarter, a bigger slowdown than expected, and after Gordon Brown and the Bank of England's Governor, Mervyn King, said that a recession, measured as two consecutive quarters of negative growth, was likely.
The markets are worried that the Monetary Policy Committee (MPC) of the Bank of England will be forced to rapidly cut interest rates in the coming months, starting at its next meeting on 6 November, to reflate the flagging economy. The consensus view among City economists is that the MPC will reduce rates by 0.75 percentage points. This, it is feared, will offer investors fewer incentives to hold the currency, leading to a more dramatic sell-off.
A number of analysts expect thatthe MPC will need to cut rates to just2 per cent by next year, a level that has not been seen in the UK since the 1950s.
It is not just falling interest rates that have put the pound under pressure. As the global economic downturn takes hold, investors are looking for what are traditionally considered to be safe havens, such as short-term US Treasury Bills, the Swiss franc and the yen.
The markets are also worried that as the economy enters a recessionary period the Government will be forced to increase borrowing, paid for largely by issuing government debt in the form of gilts. As the number of bonds floods the market, already saturated by securities from other countries attempting to raise money, so investors are worried that the Government will be forced to increase yields to attract buyers. Some also fear that the higher taxes needed to service the debt, which will soar as a result of the bank recapitalisation programme as well as the economic downturn, could hamper the MPC's ability to reduce base rates, slowing any economic recovery and, ironically, leading to inflationary pressure.
Ruth Lea, a former director of the Centre for Policy Studies and now economic adviser to the Arbuthnot Banking Group, said: "The worst case is that all this leads to a run on the pound: that is the meltdown scenario, and while I would not say it is a probability at this stage, it is certainly a possibility. Sterling has dropped rapidly in the last few days, and while some of that is due to investors rushing to the dollar, which is still the only currency people have to have, the speed of that drop is a concern. Given the amount of borrowing the Government has to do, there is a chance that foreigners will no longer be prepared to hold sterling, and if that happens, it is 1976 all over again and it is back to the IMF."
It is the rate of sterling's decline that has spooked the markets. The pound was worth nearly $2 earlier this year, with many now predicting that the pound could drop as low as the psychologically important $1.50. The currency has also devalued by more than 15 per cent in the last year against a trade-weighted basket of leading currencies.
The Treasury declined to comment on what Mr Darling would say this week, but it is understood that the Government will not take action to artificially stimulate sterling. The last time the UK actively supported the pound was in the early 1990s, when sterling was in the Exchange Rate Mechanism. Last Wednesday sterling fell 6.25 cents against the dollar, suffering its steepest fall since the aftermath of Black Wednesday in 1992, when the Major government had to abandon the ERM.
Instead, Mr Darling is likely to reassert the Government's commitment to its spending plans, saying that the Treasury will stick to its budgetary rules.
Many observers will be keen to see how far Mr Darling wants to go in bringing forward large public spending projects, such as Crossrail and the 2012 Olympics. The bailing out of the banks and reports that the Government will try to spend its way out of recession by using reflationary policies has undermined sterling, some analysts believe.