We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sun 16 Nov 2008 02:55 AM

Font Size

- Aa +

UK's Brown hits back over pound collapse comment

Opposition concern over government policies as sterling sinks to 13-year low.

British Prime Minister Gordon Brown launched a scathing attack on the opposition Conservative Party on Saturday after a senior member said government plans to borrow more could lead to the collapse of sterling.

Speaking in Washington, where he has joined world leaders in talks on the global financial crisis, Brown sharply criticised the Conservative Party's economic affairs spokesman George Osborne for warning of a possible "run on the pound".

"I regret the partisan talk from the opposition," Brown told the BBC. "When other countries are coming together for a common purpose I think it is the duty of politicians to show responsibility and to show leadership."

Osborne had accused Brown of adopting a "scorched earth" policy that will wreck the economy for future governments.

"We are in danger, if the government is not careful, of having a proper sterling collapse, a run on the pound," Osborne said in an interview with Saturday's Times newspaper. "The danger of that is that it pushes up long-term interest rates."

Commentators said it was unusual for politicians to talk about the possible collapse of a currency as it breaks an unwritten political convention in Britain.

Osborne could become Britain's next finance minister if his Conservative party were to win the next election, due by May 2010. Polls put his party ahead of Brown's Labour, although the gap has narrowed in the last month.

The pound fell to a 13-year low against a basket of currencies on Friday, including a record low against the euro, on expectations that Britain will cut interest rates again to try to boost its ailing economy.

The global financial crisis has battered Britain's economy in recent months, pushing unemployment to its highest level in more than a decade and hammering house prices and retail sales.

Companies including BT, Royal Bank of Scotland and Virgin Media have all announced thousands of job cuts.

Brown, a former finance minister whose once dire poll ratings have picked up during the financial crisis, has urged world leaders to provide a co-ordinated fiscal stimulus to help economies recover from the worst turmoil since the 1930s.

A Labour spokesman accused Osborne of trying to talk down the economy "in a desperate last throw of the dice to save his career" after he was forced to deny trying to solicit party donations from a Russian businessman.

"This is totally irresponsible from Osborne, and just shows that this is no time for a novice," the spokesman said. (Reuters)

Digital magazine: Read the latest edition of Arabian Business online