x Abu Dhabi, UAESaturday 22 July 2017

Pound falls against the greenback

The British pound dipped below US$1.50 yesterday, and that was before Alistair Darling, the chancellor of the exchequer, had a chance to set out the government's final budget.

The British pound dipped below US$1.50 yesterday, and that was before Alistair Darling, the chancellor of the exchequer, had a chance to set out the final budget of Gordon Brown's Labour government before the general election in May. By the time he finished speaking, the pound had slipped to $1.49, barely reviving on the news that the country's budget deficit would be £167 billion (Dh917.99bn), £11bn less than Mr Darling predicted in his December forecast. Analysts had already factored this improvement into their calculations.

The only bright news was that his tax on bankers' bonuses netted the Treasury £2bn, almost double what he had predicted. But he was only cautiously optimistic for the future. "There is nothing pre-ordained about continued recovery. There are still uncertainties. Financial markets are febrile," Mr Darling said. "Confidence has not fully returned to either businesses or consumers. And this is particularly the case in Europe."

He vowed to sell the government's shares in the Royal Bank of Scotland (RBS), Lloyds Banking Group and Northern Rock "in a way that maximises value for the taxpayer and recoups the money we invested". In addition, he reiterated his calls for an international tax on banks. "More countries now agree on the need for an international systemic tax on banks," Mr Darling said. "This must be brought forward quickly, as I will urge international finance ministers in Washington next month."

He also called for greater legislation and regulation on the movement of capital. "The G20 [Group of 20 leading and developing economies] countries must put in place new rules on capital and liquidity by the end of the year," he added. @Email:rwright@thenational.ae