King launches attack on 'ruinous' currency wars
Mervyn King, the Governor of the Bank of England, last night issued a thinly veiled attack on the leading protagonists in the global battle over currency valuations, warning that the row could lead to "every country [suffering] ruinous consequences".
The attack follows the escalation in recent weeks of an international row about the efforts of many countries,including China, Japan and Brazil, to keep the value of their currenciesartificially low to sustain their export industries.
Other nations, particularly the US, have complained that such tactics threaten to perpetuate the global economic imbalances that triggered the financial crisis.
Mr King warned yesterday that the strong spirit of economic co-operation seen at the height of the crisis had "ebbed away", as countries had sought to further their own interests.
"The need to act in the collectiveinterest has yet to be recognised and, unless it is, it will be only a matter of time before one or more countriesresort to trade protectionism as the only domestic instrument to support a necessary rebalancing," the Governor said. "That could, as it did in the 1930s, lead to a disastrous collapse in activity around the world."
Mr King's intervention in the currencies row came just hours after the US Treasury Secretary, Timothy Geithner, also waded into the argument. "No country around the world can devalue its way to prosperity to be competitive," Mr Geithner said. "It is not a viable, feasible strategy."
Mr King and Mr Geithner are due in South Korea this weekend for the latest meeting of finance ministers from the G20 nations. The summit is set to be dominated by the disagreementbetween the US and China, and others, over currency valuations.
- 1 What marriage would look like if we actually followed the Bible
- 3 The Chinese city where men have 'three girlfriends because there are so many women'
- 4 'Heartbreaking' Syria orphan photo wasn't taken in Syria and not of orphan
- 5 Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition
Britain to take more refugees as Cameron bows to pressure after more than 250,000 back our campaign
Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Make your voice heard: Sign The Independent's petition to welcome refugees
iJobs Money & Business
£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...
£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...
£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...
£14000 - £16000 per annum: Recruitment Genius: This company was established in...