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Bank Of England Defends Mervyn King

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http://business.timesonline.co.uk/tol/busi...icle6850825.ece

MERVYN KING is not trying to talk down the pound, say Bank of England sources, who insist that the currency markets have misinterpreted the governor’s comments.

Sterling dropped below €1.09 and $1.60 on Friday, its lowest for nearly six months and four months respectively.

Currency traders attributed the weakness to a Bank bulletin last week which suggested that the pound’s “sustainable†exchange rate had fallen. It was followed by an interview with King, in which he said the lower pound was “helpful†for the rebalancing of the economy.

Traders accused the Bank of trying to talk down the pound deliberately. It countered that the bulletin comment was an attempt to explain the fall in sterling that had already occurred since 2007, and was not a suggestion that it should fall further. Similarly, King’s comment was to a Newcastle newspaper that is running a campaign to boost local exports. The fall already recorded would be “helpful†in that effort, he said.

Figures out this week could affect sterling. Howard Archer at IHS Global Insight, the analyst, predicted that second-quarter gross domestic product data would be revised to show a smaller, 0.5%, fall, rather than the original 0.6%.

It's the stupid markets again, I mean just how fick are they.

How many fick people just want to misinterpret what Mystic Merv says?

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http://business.timesonline.co.uk/tol/busi...icle6847174.ece

Sterling slumped to its lowest level in more than five months this morning after Mervyn King, the Governor of the Bank of England, appeared to back a weak UK currency.

Speaking to The Journal, a newspaper covering the North East of England, Mr King said that the significant decline in the value of sterling in recent months “will be helpful†to rebalance Britain’s economy by helping to boost exports.

The pound dropped by 0.8 per cent against the dollar to $1.6202 as the market interpreted his comments to mean that Mr King is comfortable with the falling pound, which has declined by almost a quarter against other major currencies in the past two years. The pound also fell 1 per cent against the euro to 91.04p.

He said: “The fall in the exchange rate that we have seen will be helpful to that process but there’s no doubt that what we need to see now is a shift of resources into net exports – whether directly or in producing things that compete with imports.â€

Mr King continued, by expressing the note of cautious optimism that has characterised his recent statements relating to Britain’s fragile economic recovery. He said: “Output has stabliised. There are some signs that growth may be beginning to pick up. But we shouldn’t get too carried away by this. This is clearly very small growth after a very large fall and unemployment has risen so it’s a difficult challenge ahead."

Howard Archer, chief UK and European economist at IHS Global Insight, said: “I interpret Mervyn King’s comments as saying that a lower pound would be desirable – and I agree with him.

“Despite its slump, I am still surprised the pound is as high as it is and this could be potentially damaging for the economy,†Mr Archer added.

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$280m = £100m This was the exchange rated stated in Thunderball bond film I watched today I expect the collapse is Stearling to continue with or without Mervs comments if history is a guide to the future.

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By dinner time tomorrow we know, i have this picture in my mind of Gordon on his feet trying to talk everything up, but the £ is dropping at the same time. Everytime he opens his mouth, it drops again!

Mike

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Figures out this week could affect sterling. Howard Archer at IHS Global Insight, the analyst, predicted that second-quarter gross domestic product data would be revised to show a smaller, 0.5%, fall, rather than the original 0.6%.

How much has UK GDP fallen in global currency terms (pick almost any currency or basket thereof) since the Bankrupt of England decided they could meddle even more than they did before with the economy?

A ******ing huge amount.

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