Wednesday, 21 January 2009

UK financial update

Things are starting to get interesting in the uk as the the following three stories show:

Pound falls further against dollar as bank shares suffer again

The pound slipped to $1.3716 in early trading on the currency exchanges, down almost 1.5 cents to a fresh seven-and-a-half-year low.

Barclays's shares plunged by 33% to 48p, their lowest level since 1985. Lloyds Banking Group also continued to suffer, down another 12% to 29.3p, after a senior Labour MP called for it to be nationalised.

The talk in the City yesterday was that the UK's credit rating could be downgraded, or that the IMF might have to step in – a suggestion denied by chancellor Alistair Darling.

Freefall: Dangers of a collapse

What happens if bank share prices keep falling?

The authorities will be concerned that confidence in the banking system has been eroded and that savers will be spooked enough to start withdrawing their deposits.

Time to turn out the lights on sterling?

Jim Rogers, a punchy international investor who once worked alongside George Soros, weighed in with his view: "I would urge you to sell any sterling you might have. It's finished. I hate to say it, but I would not put any money in the UK."

After a few weeks rest over christmas and the new year it looks like uk depositors should have their running shoes at the ready.

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