Mervyn King

Hamish McRae It's not the end of the world – but it's the end of any false

This is bad news. A drop in a credit rating by one agency does not matter that much in itself, for heaven knows, the rating agencies have been absurdly wrong in their judgements. The AAA ratings they gave to dodgy US housing debt were one of the factors in the banking crash of 2008. Both the US and France have seen a similar modest downgrading of their debt. But it matters because it focuses investors on the inherent weakness not just of British national finances at the moment but also of the longer-term commitment of the UK authorities to holding down inflation and assuring investors that they will get paid back in real – rather than devalued – money.

Pound slumps after bank reveals split on stimulus

The pound has plummeted on international exchanges after a surprise split emerged on the Bank of England’s Monetary Policy Committee (MPC) about whether more stimulus should be injected into the struggling British economy.

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