'It is the case that he is incompetent and lacks the qualifications to be Chancellor, but none of his likely replacements questioned defending an overvalued exchange rate in the European exchange rate mechanism,' said Chris Dillow, of Nomura Research Institute. 'No one else would have avoided Black Wednesday.'
Glenn Davies, chief economist of Credit Lyonnais Securities, said: 'I think somebody should have gone last autumn, it's a bit late now - Lamont is obviously a scapegoat.'
Bill Martin, chief UK economist at UBS Global Research, argued that the weakness of the Government meant that replacing Mr Lamont would make little difference to policies. There would be a reluctance to raise interest rates when inflation pressures re-emerged and the assault on the structural budget deficit would probably be watered down following adverse reaction to legislation imposing VAT on domestic energy.
But Roger Bootle, chief economist at Midland Global Markets, believed that a change in policies was possible if Mr Lamont were replaced. 'One of the problems of the past year is that Lamont is in a very weak position. His lack of command means that he doesn't stand up to his Treasury advisers and he is very dependent on the Prime Minister. A new Chancellor might be more independent.'
Mr Bootle said Mr Lamont's emphasis on a strong pound as a bulwark against inflation contrasted with the need to let sterling remain low to improve manufacturing industry's competitiveness. 'On the pound and interest rates, a change of chancellor could make a difference.'
yesterday's reaction to reports that Mr Lamont would be moved was in marked contrast to last autumn's widespread City demands for Mr Lamont's resignation after sterling was forced out of the ERM.
The City was then virtually unanimous in calling for him to step down. Mr Davies said the Chancellor had since tried to mollify some of his City critics, cutting interest rates, appointing a panel of outside forecasters, providing help for exports, industry and the housing market, and delaying tax rises until the recovery becomes entrenched. 'Maybe he's been doing a better job.'
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