Larry Elliott
London Guardian
December 22, 2009
One of the City’s leading financiers last night predicted a looming collapse of financial confidence in Britain as Gordon Brown received the twin blow of a fresh warning from a ratings agency over the budget deficit and figures revealing that the slump of the past 18 months is now officially the deepest since the second world war.
Terry Smith, chief executive of money brokers Tullett Prebon, said: "We will have a crisis of confidence in the credit worth of the UK. People won’t be willing to buy gilts at anything like the current interest rate, or even possibly in this currency and we’ll have an interest rate hike and/or a good, old-fashioned sterling crisis. Possibly both."
Smith’s comments on Sky News came just hours after ratings agency Fitch said that the UK – along with France and Spain – needed to "articulate more credible and stronger fiscal consolidation during the course of 2010 to underpin confidence in the sustainability of public finances".
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