Are We Overdue A Run On The Pound?
BoE governor Mervyn King, appearing before the Treasury Select Committee, warned today that QE measures may not be over, and that credit ratings agencies were expecting a "detailed explanation" as to how the government intended to reduce it's budget deficit.
Having borrowed around GBP30 billion a year between 1997 and 2007, last year the government borrowed five times that amount, and this year that figure looks set to come in closer to GBP200 billion.
It might be only a matter of time before Britain's ability to pay gets called into question more seriously than it has been to date.
“We would like to get back to a situation where the banking sector can expand its lending, but I am not sure that is going to happen until we have seen further consolidation in the balance sheets of the banking sector," warned King.
As if by magic, data from the British Bankers' Association today revealed that mortgage lending fell to a nine year low in January. How low is low? They say that a fraction over GBP8 billion was lent during the month, that is less than half what was being lent out in the halcyon pre-crisis days of 2007.
With an election looming, as well huge question marks over the size of the national debt, the pound might be sitting pretty to be the next currency to take a pasting on the international forex markets before long methinks.
Having borrowed around GBP30 billion a year between 1997 and 2007, last year the government borrowed five times that amount, and this year that figure looks set to come in closer to GBP200 billion.
It might be only a matter of time before Britain's ability to pay gets called into question more seriously than it has been to date.
“We would like to get back to a situation where the banking sector can expand its lending, but I am not sure that is going to happen until we have seen further consolidation in the balance sheets of the banking sector," warned King.
As if by magic, data from the British Bankers' Association today revealed that mortgage lending fell to a nine year low in January. How low is low? They say that a fraction over GBP8 billion was lent during the month, that is less than half what was being lent out in the halcyon pre-crisis days of 2007.
With an election looming, as well huge question marks over the size of the national debt, the pound might be sitting pretty to be the next currency to take a pasting on the international forex markets before long methinks.
