Run On The Pound ? Jeremy Corbyn Says Should Plan For
– Right to plan for ‘run on pound’ if Labour wins says Corbyn and Labour party
– British pound already down 20% since Brexit, collapse already in play
– Run on the pound likely due to Labour’s ‘command economy’ approach
– Collapse in Sterling would undermine UK financial system
– Portfolios holding sterling and related assets would be significantly affected
– Pension funds and property the most likely to get hit by run on the pound
– Gold to benefit as sterling collapse picks up pace
Last week Labour Shadow Chancellor John McDonnell said the party was carrying out “war-game-type scenario-planning” for events such as “a run on the pound”.
A run on the pound would see the value of the currency plummet, increase inflation and increase the value of those age old stores of value – namely gold and silver.
McDonnell’s reasons for war-gaming were because of expectations that a ‘radical’ Labour government would face a range of challenges.
He said was seeking to “answer the question about what happens when, or if, they come for us”.
When asked what McDonnell meant by ‘they’, party leader Jeremy Corbyn said he was likely referring to outside forces who have previously punished Labour governments in such a way.
Of course the most famous run on the pound in living memory happened in 1992 but for Labour it was nearly 50 years ago that still haunts them.
In November 1967 Harold Wilson’s government announced it was lowering the exchange rate. The pound fell to $2.40, down from $2.80, a fall of just over 14%.
Wilson is now much ridiculed for his statement made on national radio and television in which he ‘reassured’ citizens that:
“It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.”
Wilson’s comments, whilst derided at the time, seem to still ring true for our own government who do not appreciate that ongoing policies have resulted in a ongoing devaluation in the pound.
Labour’s adverse effect on the pound
