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Osborne accused of trying to sabotage pound
Joe Murphy, Political Editor17 Nov 2008
PETER MANDELSON stepped up Labour's attack on George Osborne today by claiming he had tried to sabotage the pound.
His extraordinary allegation was that the shadow chancellor deliberately hoped to torpedo the economy by predicting a run on sterling.
"What George Osborne was trying to do in his remarks was undermine the confidence of markets, undermine the confidence of traders that the medium-term direction of government policy is sound," said Lord Mandelson, the Business Secretary. "That's why what he was doing, frankly, was reckless and irresponsible but also quite contradictory." Mr Osborne's allies expressed incredulity at the allegation, which went further than Labour's criticisms at the weekend when the party said Mr Osborne had imperilled economic stability, but not that he had done so deliberately.
The markets showed what they thought of the row today- by ignoring it completely. Sterling fell against the dollar by 0.65 cents to $1.4725 but then climbed back to $1.4933. Mr Osborne hit back by publishing an analysis of sterling falls since the summer, which he said could be attributed to comments or speeches made by Gordon Brown or Alistair Darling. The pound fell from $1.98 to $1.80 in the three weeks after the Chancellor announced that he was reviewing fiscal rules - a strong steer that borrowing would let rip. It fell again in August after Mr Darling warned that the financial crisis was the worst in 60 years.
It plummeted to $1.55 last month after he said in his Mais lecture that he was scrapping the fiscal rules. And when reports appeared claiming the mini-Budget would give away £15 billion, it slid again to below $1.50.
Mr Osborne defended his comments on sterling and denied that he had "talked down" the currency, making the crisis worse.
Reader views (55)
Shows what an important and influential man George Osborne must be if we are to believe that his comments alone will influence the markets and devalue sterling - oh that Brown, Mandelson and Darling could be so influential. The next Warren Buffet perhaps?
- David, Lewes, East Sussex, 18/11/2008 07:02
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I've commented regularly on Osborne's inability to correctly analyse a situation, though this time he's spot on. Although it's a painful truth, you can't just drop interest rates and turn the world into a better place. Gordon Brown has had 10 years of spending our money like it's going out of fashion. Now he's been asked to pay for it, he's slating the opposition for highlighting this fact.
It's time to shout Emperor Brown has no clothes. Well meaning, but a hopeless and hapless PM and chancellor.
- Da, london, 17/11/2008 23:44
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James "For those who blame Osborne for telling what every one knows, from 1 to $2 to $1 to $1.50 today. Pound has not moved much since last week. Still devalued to what it was in July."
Not as bad as the Aussie dollar: near parity with the US$ at the start of July, now worth 65c US. Against sterling, one pound would have bought you about AUD2.02 in July, 2.30 now.
The real mystery to me is why everyone suddenly thinks that the US$ is the currency to hold
- Tonyb, Melbourne, Australia, 17/11/2008 22:15
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P Wells, Reading
Actually I don't work for the labour party. We don't all fit in to those neat little boxes people like you set aside for us. Rather than ranting about which party various posters might support, we would be much more impressed if you had come up with a single policy set out by Cameron/Osborne that would have made a difference. Now, I know that would be hard because like you, they are all bluster and and policy free. You seem a bit irate, whats the matter? don't tell me you work for
City Group?
- James Hennessy, london england, 17/11/2008 21:14
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Labour have invented new tactics to avoid criticism. If you mention Sterling is falling in value, they refuse to debate the situation on the grounds that this discussion is harming the economy. Similarly, if you discuss immigration policy or poor treatment in hospitals, you are deemed to be a racist. You are simply not allowed to make any criticism of the government.
- Stanley Kenner, Barkingside, Essex, 17/11/2008 19:20
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Why should George Osbourne go when he making such a good job of ensuring Labour win the next election.
- Melvyn Windebank, Canvey Island, Essex, 17/11/2008 19:00
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Well Despot Brown does it again - more frightening than the collapsed economy is Brown's bullying censorship. It is Osbourne's job to take the government to task. If Brown had his way he wouldn't have any opposition.
Labour has been in power for over a decade. They are still failing to take responsiblity for the countries problems. labour's problems. How can they blame Thatcher and the tories for their destruction of Britain is beyond arrogant.
Also has any one else noticed how smug and happy Brown is looking as the country desolves - our leader is still relishing his political success whilst thousands are losing their jobs -true labour spirit hey??
- Hannah, London, 17/11/2008 18:24
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You need to sit outside the UK and look into the currency market. You will see, how the British Pound has suffered on the last 12 months.
- Muheed Jeeran, Colombo, 17/11/2008 18:16
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George Osborne is just telling the truth. Why should he think of sabotaging the pound, when Gordon Brown is doing such an excellent job of wrecking the pound himself.
More pertinent is why was Mandelson wined, dined by the Russian billionaire and the Rothschild’s not forgetting Mr. Murdoch was in the vicinity.
Silly me I should have known it was his, personality, charm, character and scintillating wit at the dining room table, that he was invited and it had nothing whatsoever to do with his position he held in the EU.
- Terence Carroll, Dibden Purlieu, England., 17/11/2008 18:08
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How can anybody take anything that Brown, Mandelson or Darling say seriously? Grow up guys, they are clutching at straws, and trying to deflect attention away from their roles in this sorry mess! They are the problem, not the solution. How long has Nu Labor been in charge?
- Abe, East Grinstead, UK, 17/11/2008 17:53
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Instead of blaming the donkeys in charge? of the country lay the blame at the doorstep of the Bank of England. Cheap money never will do any good. It makes the borrower irresponsible and the saver poor.
- Maurice Harvey, Colmenar Spain, 17/11/2008 17:40
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Once again George Osbourne is long on criticism but short on original ideas.
- Derek Cockburn, East Kilbride, UK, 17/11/2008 17:39
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We are back to spin again... a foregone conclusion with PM's return....as well as AC.
Of course, its George Osborne who is taking the decisions and so causing the problems........silly us for think the Government was supposed to be in charge. How did the run on the £ start b4 GO made his comments?
Its time for the British people to be told the truth about the economy, as unpalatable as it might be. The duty of Opposition is, when needed to say it like it is. It was with the Governments 'blessing' we borrowed and spent like we have individually as if there was no tomorrow, because thats what the Government was doing. Spending recklessly... not only has the boom ended, and we are bust, but so is the Government's policy and reputation bust...both economically and morally, as they have dragged the nation down into the gutter financially and through their sex equality legislation.
We have been dragged further into the EU morass.
Standards in schools have been dragged down...crime has been dragged up.......
Now all thats left is for the British people to spend the next ? years paying for this social and economic experiment. We have 'laboured' under Labour, and we will go on 'labouring'.
And they call this 'having experience'? Well, its experience that we could have done without, and needs to change asap!
- Andrew Fairhead, Alresford, UK, 17/11/2008 17:31
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Now, would I prefer to trust Osborne or Darling?
Youth over experience?
Someone who is too young to remember the recessions of the 70's, 80' and early 90's or someone who lived through them?
Someone who doesn't understand what 'said aboard stays aboard etc. etc.
The Tories haven't a clue at the moment. They are as rabbits in headlights. We can only thank goodness that Brown was not tricked into an election last year. If we had Cameron leading this country now we would truly be disbelieved by our allies and heading for bankruptcy. Mercifully, we are to be spared that fate.
And I don't even vote Labour!
- Charles Bloom, Hampshire, 17/11/2008 17:23
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Labour accusing Conservatives about not caring about the value of money? How deliciously ironic given this governments spending record and the disastrous PFI. Labour has been, and always will be, the biggest threat to our economy.
- Karl, Scotland, 17/11/2008 17:05
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Well after 11 Years of Labour Government Misery I think it right that George Osborne should speak out against the dangerous partnership of Gordon Brown and Alistair Darling.
Since Mr Brown came to power he single handedly destroyed the pensions industry with his famous tax raid. The Stock Market is only worth half its value when the Tories left power. The housing market bubble will have been completely wiped out if it carries on falling over the next year. And finally he wants to distroy the currency and bankrupt the country with all this extra borrowing.
Well done Mr Osborne, but I feel sorry for you and Mr Cameron who will need to sort all these horrible problems out once Mr Brown and Mr Darling have left office.
- Yuri Naraine, East Ham, England, 17/11/2008 17:03
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I am amazed by the comments today, Alex from Putney & James Hennessy (I bet they work for the Labour Party or are irrelevant class warriors) the Labour Party Cronies have been in power for over 10 years and have feathered their nests to make them just as rich as the Tories and hated just as much. The Labour benches are full of Stinking rich people, and most made their fortunes since Labour came to power. Under the Labour Party the Rich got Richer, the poor poorer...end of story!
Andy from London & Collins Parry, you must also be working for the Labour Party to suggest, that the Party in opposition can effect the markets, the markets are only affected by economic conditions and how Govt reacts, its what the Gov't says and do which effect markets. However Labour still act as they are the opposition and blame the Tory party for everything that goes wrong under thier watch.
So when the markets crash again, Gordon Brown goes cap in hand to the IMF and is told, sorry Gordon we don't have enough money to bail out the UK you will finally have to take responsibility for bankrupting the UK and find a new lie to cover your tracks!
(which is why Mr Brown is begging the IMF now to increase its funds now, under the guise other economies will need help, Gordon knows whats coming) and still supporters of the Labour Party will still say its all the Tories fault the silver spoon brigade.
- P Wells, Reading, 17/11/2008 17:00
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Osborne cannot sabotage the pound since Brown has already done so. And by the way, can we pension scheme members have our £5 billion (per annum) back as part of the tax cuts being planned to restore Brown's political credibility.
- David Morris, Croydon UK, 17/11/2008 16:54
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Well what do you know, after all that talk that Osborne has killed the pound it is actually up today to over 1.50 to the dollar. The repercussions are that what Osborne said had no bearing at all on the value of sterling. The markets aren't stupid, they had already taken into account all the data so what Osborne said made not the slightest difference. Now BBC apologise for blaming Osborne and admit it is that moron Brown and Labour that is killing the £. I want to see headlines to this effect the same way as you blamed him over the weekend.
- Lemar, London, 17/11/2008 16:52
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Sabotaging the Pound and destroying the economy of Britain is the job of Mandelson and Brown! How dare George Osborne make any comments! What does he think he is? Shadow Chancellor, or something?
And as everyone knows, it takes people with special experience to cause the levels of damage sustained in recent years.
- Martin, Telford England, 17/11/2008 16:50
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Andy, you're being a proper wally saying Osborne has a "very poor economic knowledge". Do you think he got the post of shadow chancellor just by luck.
The fact is he's been honest when Labour haven't. Wasn't so long back Gordon brown has his fiscal golden rules set in stone. Now what's happened to them? The man is a joke. He's bent the rules to suit himself.
My only concern is that the Tories will inherit a shot economy, while New Labour inherited a very strong recovering one in 97. Look how they've messed up again!
- Rad, Stockport, 17/11/2008 16:39
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The whole thing is a doomed mess, lets just start again.
- Rob Medlock, Peterborough, 17/11/2008 16:36
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Mr O could not cause a run on the pound no matter what he says; sterling is being pounded (excuse pun) by the underlyings ie massive debt, high taxes, low interest rates. Also, the abolition of the UK as a sovereign nation and its replacement as a mere region of the EU means that our currency is becoming very undesirable. It has nothing to do with Mr Osborne and his dodgy mates.
- Neil, London UK, 17/11/2008 16:35
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Osborne stated the obvious,but sadly he is not up to the job. Ken Clarke must come back whilst all this is going on. The Tories need to oppose and oppose again this mad way of trying to solve this problem inflicted
on the country by these incompetent Labourites.
Tax cuts? Simple! Cut the Tax on Diesel & Petrol & abolish the T.V License. Let the Biased Broadcasting Corporation fund themselves. Smiles all round.
- Mordwinoff, Lisle France, 17/11/2008 16:33
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Corblimey41, Braintree
Making fun of someone's disability be it Gordon Brown or anyone else, isn't funny.Lets hope your grandson grows up to be a bit more respectful than his grandad.
- James Hennessy, London England, 17/11/2008 16:31
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For a definition try the following "SPIN.. a morsel of truth wrapped up in a convenient lie" Labour now has 3000+ spin doctors, so its no wonder that Labour ministers wouldn't know the truth if it bit them in the bum. Anyone with 'O' level economics knows that if you slash interest rates it will trigger a fall in the value of your currency.This in turn will discourage inward investment.By blaming George Osborne Labour are merely reacting to have been bitten in the bum..
- Jeremiah, London, 17/11/2008 16:25
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The real world of currency trading works like this: nobody gives a stuff what opposition politicians opine about the vulnerability or otherwise of currencies. What matters is the policies that governments pursue. To the extent that Osborne has any influence over the current value of sterling, it's because he will be the next Chancellor, and will be setting economic policy from 2010. And what he's telling the markets is that he's very worried about Labour's reckless spendthrift policies, and will likely be far more prudent on borrowing. The currency markets will like that, and if anything, they will be reassured. They will figure that the current bunch of prannocks may be replaced by someone who will restore a small measure of sanity.
- Burning Our Money, London, 17/11/2008 16:24
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With people as stupid as you lot its no wonder I'm emigrating.
- Frank, Durham, England, 17/11/2008 16:03
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The head of the IMF says that providing a fiscal stimulus of up to 2% is the right thing to do in these economic circumstances.
G20 leaders agree they need to act to stimulate a stalling world ecomomy, and agree with the lead taken by Gordon Brown to recapitalise the banks, adopting the idea for their own economies.
Nobel Prize winner for economics, Professor Paul Krugman says that the approach taken by Gordon Brown is the right one in these conditions for the world economy. Now we need a global approach. Sadly, Osborne, Cameron and Co. are the only ones advocating a small, piece meal approach which will do nothing to help the UK through these very difficult times. Let's hope they never get the chance to steer the ship of state.
Cameroon, Osborne and the Tories would be a huge risk for UK plc!
- William Davies, Bangor, UK, 17/11/2008 16:02
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Mandelson's speciality is clouding issues - in this case the government's role in the collapse of sterling. By spinning Osborne's perfectly legitimate warning into something approaching grand treason, he is trying to create the perception of a Tory gaffe to conceal the mother of all gaffes which is Labour economic policy.
- David, London, England, 17/11/2008 15:57
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I believe Mr.Osborne need to look back and think,there fiscal policy of the past led us to this mess and credit crunch,when they let Building Society demutachalis and become plc,every one has share option and taken cashed out of system and awarding them self big pay rise over period of time,share holder and plc bosses have taken out biggest chunk out and led us to financil disaster,now they cannot see the sense of urgency and try to score a point.Good job we have a prime Minister who has a vision.
- Bob Patel, West Midlands,Sandwell Borough, 17/11/2008 15:54
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Some of the public would like to believe anything but the fact that overspending on anything, whether at home or on the country ALWAYS causes pain and in the extreme bankruptcy. So any tax cuts from any source or any boosting of dubious banking is welcomed just because the great British Public cannot face the fact that voting in the disaster known as Nu Labour has caused them REAL pain and will cause them MORE pain.
Not that the current Conservatives look that great but at least they consider what too much spending will bring.
Bring back Ken Clarke or some other big hitters.........
- Richard, London, UK, 17/11/2008 15:51
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What sanctimonious claptrap we are hearing from Mandelson. Don't let's forget for a minute that this was the master of spin who coached Blair and Brown to do everything they could to make the country feel bad about itself in the last two years of Conservative Government when in fact an economic uptrend had started which was to last for over 10 years. Of course it is treason when this medicine is administered in reverse by someone not on message with tired New Labour.
- John Wisbey, Virginia Water, Surrey, 17/11/2008 15:50
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Osborne is wrong. The run on the pound has already taken place. There will probably be further falls as we are in real trouble. The government need to find someone to blame to steer attention away from the fact the recession is going to be worse than ever and also note that Brown is claiming that we are now only better placed than we were in 1990, rather than as he claimed better placed than other countries. Please don't believe all Labour's spin in this situation. It shows the depth these people are going to go to hold on to power.
Shockingly we are just passing this problem on to the future tax payers and all of the government will be pensioned off nicely, thank you all very much.
- G Morgan, Worcester, 17/11/2008 15:37
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we've been having a run on the pound against the US$ and EURO for the last couple of months, George is simply laying out the truth unlike Crash Gordon and team who got the UK into this mess.
- Mark, london, 17/11/2008 15:35
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George seemed to be only making a statement of the 'bloody obvious'. Does New Labour really think all of the populous is too thick to realise the macro and micro economic consequences of what's happening. I think not and he'll find out soon enough through the ballot box. The only worry is who's going to replace this lot. Me thinks a 'hung' Parliament will be our only salvation with Gordon of the Split Personality alias Mr Stalin-Bean relegated to the back benches well away from the cashbox. In his shoes - maybe Saint Vincent.
- John, Leighton Buzzard, Beds, 17/11/2008 15:30
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Arrogance,Spin and downright lies from a controlling party who will not allow challenge .This is what we get with apathy from the populace at voting time. let us make sure that we vote and then we will see the truth and end the shables of this government who think we will forget their lies about IRAQ ETC. and as for Mendelson who can trust a word this twice removed minister can say.
- Peter Holland, Chesterfield England, 17/11/2008 15:28
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For those who blame Osborne for telling what every one knows, from 1 to $2 to $1 to $1.50 today. Pound has not moved much since last week. Still devalued to what it was in July.
Many who are posting here are fallin for Mandelson's
wicked spin. Wait for billions of Pounds worth of Brown Bonanza and BOE King's interest cut to 1% and see how
Pound is going to go through the floor. For those who thinks Brown has knowledge of economics, he wrote
a thesis on 'Scottish Labour Party' history and his chancellor Darling who is rarely seen or heard much less than Osborne, Darling was a lawyer. No one is economics genius here.
Brown played with taxes and reduced this country to a dust bowl. After this amazes me how any one could support 'boom and bust' Brown
- James, LONDON, 17/11/2008 15:18
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Collins Parry,you obviously have a very very short memory.Who got us in this fix by borrowing , borrowing and more borrowing, You are of your head!
How dare you compare this Scots tongue chewing idiot with Churchill. My grandson has more idea on how to handle money than McBroon.
- Corblimey41, Braintree, 17/11/2008 15:16
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Oh dear, oh dear, isn't it amazing that people ignore simple facts such as the pound massively losing power in the last few months. It's even managed to lose 30% of it's value against the dollar, which let's be honest isn't exactly strong in the current climate. If you really wanted to know what it was worth you'd simply check the exchange rate charts over time and see what a state we're in.
- Bob, Cheam, 17/11/2008 15:15
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Mandelblott and Brown undertakers to the once great UK.
As Mugabe's scotts "prudent" disciple , Brown has created a £2.4 Trillion debt and this will turn into £3Trillion soon. Too big for IMF this time unless pound slides to about 30 cents.
- John Prendergast, Stafford UK, 17/11/2008 15:14
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Mandelblott and Brown undertakers to the once great UK.
As Mugabe's scotts "prudent" disciple , Brown has created a £2.4 Trillion debt and this will turn into £3Trillion soon. Too big for IMF this time unless pound slides to about 30 cents.
- John Prendergast, Stafford UK, 17/11/2008 15:14
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This is becoming unwatchable -- the most gruesome public assassination since the short film "Bambi v Godzilla".
- Bloke, London, 17/11/2008 15:06
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"He is such a pompous young man that he is convinced that the world revolves around him." - could be Osborne or Mandy! What I'd like to know is how Mandelson has suddenly become an economics and financial expert from his earlier position of just a spin doctor?
- Paul, London, 17/11/2008 14:52
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What an extraordinary reaction from Mandelson. Does the truth hurt?
- Roger Slade, Winchester, Hampshire, England, 17/11/2008 14:45
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The better the electorates get to know the Tories the more they would come to the honest believe that they have nothing to offer. The want change, sometimes i wonder what they want to change. Most of us are still waiting to see what they stand for.
- Alex Lisinge, Putney London, 17/11/2008 14:42
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The privileged Mr Osborne couldn't be more removed from the average persons every day problems. Does anyone seriously think that the answer to London and England's problems right now should be in the hands these three silver spoon in the mouth eton school boys? Everytime Osborne, Cameron, and Johnson open their mouths they prove otherwise.
- James Hennessy, london england, 17/11/2008 14:09
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Poor old George, if the pound had fallen he would have carried the blame but the pound rose and the conclusion is that no-one listens to the schoolboy shadow chancellor
- Don Davies, Beaconsfield, 17/11/2008 13:54
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Oh what tangled webs we weave - when we practice honesty. New Labour does not know what truth is. Remember Weapons of Mass Destruction etc.
- Frederick, London, UK, 17/11/2008 12:28
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The reaction of the market shows what everybody but Osborne knows. The Tories are irrelevant and have been since 1997. He is such a pompous young man that he is convinced that the world revolves around him. Now he has shaken off his high-pitched upper class voice he thinks we hang on his every word. That's why his colleagues are hoping he gets shuffled away.
- S Lloyd, Acton England, 17/11/2008 12:11
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We see what clowns the present day TORY PARTY prove themselves tobe once again, point scoring at whatever cost to our countries finances.
Once again they have proven to me that Gordon Brown is the
man we need to undertake a sane handling of the desparate ecconomic situation the world finds itself embroilled.
Gordon Brown stern strong, then who wants a laughing smiling clown we have a second Churchill as a PM.
- Collins Parry, cardiff wales., 17/11/2008 11:52
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Euro 1.2602?
Don't think so
- Chris, London, 17/11/2008 11:11
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So ‘Mandynomic’s says that borrowing shed loads of cash and throwing it into a hole is fiscally sound. But when someone happens to comment that the Emperor has forgotten to don his Kilt and is subsequently naked. Well that’s just ‘irresponsible.
It never fails to surprise me just how stupid Nu Liebour considers us ‘sheeple’. They lie to us repeatedly and people STILL believe every word they say. Astonishing! Well if the sheeple have missed the plot the financial markets won’t. Goodbye Pound it’s been fun!
- Rusty Shackleford, UK, 17/11/2008 11:01
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Oh dear, it looks as if Mr Osborne has had the poor taste to be honest! It would not be the first time that such behaviour has induced fits in the Labour leadership!
- W R Stevenson, London SE26, 17/11/2008 10:47
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Whilst Mr Osborne may feel that it is his job to tell the public 'the truth' he does so with a very poor knowledge of economics, with no policies to counter his perception and, even worse, risked putting the economy at risk with his ill-timed, stupid comments at a time when confidence in the markets is key. Whilst he is shadow chancellor the Tories are at huge risk of not being taken seriously.
- Andy, London, 17/11/2008 10:25
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