Pound rebounds despite Osborne's warning
Despite predictions that the British pound would take a sharp fall today because of comments by Tory shadow chancellor George Osborne on saturday, the pound opened trading slightly up against the dollar, causing many to breath a sigh of relief - for now. The pound remained unchanged against the euro. The currency has suffered an unprecedented slide over the past few months, losing 1/4 of its value since July.
Sterling ticked up against the dollar in early trading today, despite forecasts by George Osborne, the Shadow Chancellor, that higher government borrowing could lead to a run on the currency.
The pound recovered to $1.492 on Monday morning, after closing at $1.4855 on Friday before Mr Osborne's comments emerged in The Times that sterling was heading for "a collapse" if Gordon Brown attempted to borrow his way out of recession.
Mr Osborne later defended his remarks against accusations that he was talking down sterling. "My job... is to tell the British people the truth about the British economy," Mr Osborne said in a TV interview.
Lord Mandelson, the Business Secretary, today accused Mr Osborne of being “irresponsible and reckless” in his comments about the pound.