HAMISH MCRAE: Government growth plan must impress global finance

HAMISH MCRAE: If Government can persuade global finance that budget will revitalise economy, it has chance of better outcome than Black Wednesday

Emergency budget: Kwasi Kwarteng

The eyes of the world will be on the UK this week, but after tomorrow the focus will shift from the spectacle of splendour and sadness to the harsh reality of how its new Government will seek to rebuild the nation’s economy and its finances. 

Viewed from this side of the Atlantic, the backcloth to Kwasi Kwarteng’s emergency budget next Friday looks pretty bleak. 

The dollar is riding high as the safe haven in troubled times, and the pound – well, it has taken a real beating, down below the level it was against the dollar when it was kicked out of the European Monetary System on Black Wednesday 30 years ago. 

That made George Soros a fortune, destroyed the reputation of John Major’s government, and paved the way for New Labour in 1997. It is an uncomfortable memory and the stakes now are high. 

There will be the immediate political judgment in Britain but in some ways the financial and economic judgment of the rest of the world will matter more. If this Government can persuade global finance that this budget will revitalise the economy, then…

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