By +Eric Jafari
The UK may
have a rocky road ahead if the predictions of the Euro Group's new
president come to fruition. Jeroen Dijsselbloem claims
concerns over the state of Britain's finances are increasing, with
high national debt and budget deficit leaving the country open to
attacks from currency traders, the Daily Telegraph reported.
These statements come after news that the value of the pound
slipped once again and will not be welcomed by the British
government, which is set to deliver its Budget on March 20th.
Sterling has gone into free-fall, dropping from €1.23 to below
€1.16 since January. Confidence is arguably slipping and with the
last sterling crisis of 1992 never far from people's mind, the
coalition will be desperate to save the pound.
However, Mr Dijsselbloem's statements certainly cast doubt on
the future. Speaking to students at the University of Amsterdam, he
stated: "England is vulnerable; it may be faster on the currency
speculation. That has happened in the past. A new sterling crisis
could happen again." With relations between the EU and the UK
already sensitive, Mr Dijsselbloem's conjecture about the state of
the pound could also cause difficulties, the newspaper
Nonetheless, the UK is likely to put up a fight, with the
Monetary Policy Committee (MPC) already voting for more stimulus to
be introduced to boost the UK economy. During the meeting, Bank of
England governor Sir Mervyn King was also among those recommending
further quantitative easing. According to the minutes, Sir Mervyn,
David Miles and Paul Fisher sought an additional £25 billion in
quantitative easing, but were outvoted six to three. MPC members
believe that more targeted measures are needed to address the UK
economic position, boost the flow of credit and increase demand and
supply in the economy.
David Cameron has, however, stated he will not go back on his
plans for the economy. In a speech he claimed his policies were
beginning to pay dividends and faltering at this juncture would
"plunge us back into the abyss". "The decisions we make now will
set the course of our economic future for years to come," he said.
"We will stick to the course."
11 March 2013
Quantitative Easing,Jeroen Dijsselbloem,UK Economy