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UK could face ‘new sterling crisis’

Your Money
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Your Money
Posted:
Updated:
08/03/2013

The UK could be facing a “new sterling crisis” as concerns grow over the state of public finances.

Jeroen Dijsselbloem, the Dutch finance minister, took a swipe at Britain’s high national debt and persistent budget deficit, pointing to this as to why the UK is increasingly vulnerable to attacks from currency traders, the Telegraph reports.

The pound has already dropped from €1.23 to below €1.16 since the start of the year.

Dijsselbloem said the UK was a much riskier proposition than the US due to the state of the country’s public finances, according to the paper.

“England is vulnerable, it may be faster on the currency speculation. That has happened in the past. A new sterling crisis could happen again,” he said.

A number of other prominent European officials have attacked the UK economy in recent years. 

Christian Noyer, the head of the French central bank who sits on the European Central Bank, said in late 2011 that Britain should lose its AAA sovereign credit rating before France.

“[The ratings agencies] should start by downgrading Britain which has more deficits, as much debt, more inflation, less growth than us and where credit is slumping,”  Noyer said.