Left Menu
Development News Edition

Sterling would rise under Labour government - Labour finance chief

Reuters | London | Updated: 14-07-2019 18:10 IST | Created: 14-07-2019 18:08 IST
Sterling would rise under Labour government - Labour finance chief
Image Credit: Pixabay

Sterling would rise if the opposition Labour Party won an election, the party's finance policy chief John McDonnell told the Sunday Times, playing down the idea that a socialist government could trigger capital flight. Britain's prolonged political crisis over Brexit has raised the likelihood of an early election and damaged the ruling Conservative Party's poll ratings. That has improved the once-distant prospect of the socialist-led Labour government.

McDonnell, the right-hand man to Labour leader Jeremy Corbyn and would-be finance minister in a Labour government, said markets would not panic over his plans for new taxes, nationalisations and large-scale investment. "I think what we'll see is sterling strengthening, if anything, as a result of the plans we've laid out," McDonnell told the newspaper.

Sterling, which has weakened since Britain voted to leave the EU in 2016, was under renewed pressure last week because of the growing possibility of interest rate cuts in the event of an unmanaged Brexit, with soft economic data adding to its decline. Markets are concerned that Britain could end up leaving the European Union without a deal if the ruling Conservative party chooses Boris Johnson as its next leader.

Labour is opposed to a no-deal Brexit, wants a referendum on any exit deal Johnson negotiated and would campaign to remain in the EU over accepting his deal. But, the party has not decided whether it would cancel Brexit altogether if in power. Ever since veteran socialist Corbyn was elected leader of Labour in 2015, many investors, banks and economists have warned that his plans could introduce uncertainty and disruption for the world's fifth-largest economy.

McDonnell said in 2017 that Labour had to "scenario-plan" for capital flight and a run on sterling, even though he didn't think they were likely. Since then he has publicised regular meetings with banks and financiers to sell his economic plans. "We know what our programme will be. The market will know well in advance and will react appropriately, and it won't be on the basis of capital flight or anything like that," he said.

Labour plans to nationalise industries such as water and mail delivery by issuing bonds in exchange for shares and has outlined a 500 billion pound decade-long public investment plan.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION / BLOG / INTERVIEW

Education post-coronavirus: Schools to rush for more digitalization

Digital education would undoubtedly boom in the post-coronavirus world, supported by educational institutions that have discovered its efficiency during the crisis, but it is still not expected to outshine traditional classroom learning....

Public health care post-COVID 19 to go for revamping, not rebooting

Until now, the economies used to classify healthcare sector under social expenditure. However, the devastation caused by COVID 19 pandemic has upgraded public healthcare on topmost priority and core economic activity for controlling future ...

Coronavirus lockdowns to speed up long-pending revamping of supply chains

With millions of production lines impacted, business disruptions to some extent are unavoidable and the lessons learned from this turbulence will leave an everlasting impact on both global and local levels of supply chains....

COVID 19 to catalyze the redefinition of urban planning and sustainability

Until now the urban planning was focused on mitigation to natural disastrous, climate change, pollution, chronic illness and lifestyle diseases. However, the global pandemic of novel coronavirus is going to change the whole narrative of urb...

Videos

Latest News

US STOCKS SNAPSHOT-Wall St rises at open as investors weigh stimulus against shutdown

U.S. stocks opened higher on Monday as President Donald Trump followed last weeks massive fiscal stimulus by extending his stay-at-home guidelines, leaving investors guessing at their economic impact.The Dow Jones Industrial Average rose 41...

Italy may be on wrong path in fighting coronavirus contagion -scientist

Italys measures to halt coronavirus contagion do not seem to be working and it should change its strategy by setting up centres to separate people with suspected symptoms from their families, a prominent Italian scientist said on Monday.Ita...

Trump says Putin to 'probably ask' for sanctions lifting

President Donald Trump said Monday he expects his Russian counterpart Vladimir Putin to ask for a lifting of US sanctions during an upcoming phone callYeah, hell probably ask for that, Trump told Fox NewsTrump did not say what his response ...

Haryana police seal inter-state borders, urge migrant labourers to move into shelters

Haryana police said on Monday they have completely sealed all inter-state borders to prevent the movement of migrant workers and effectively control the spread of COVID-19, after a large number of labourers from UP, Bihar and Odisha set out...

Give Feedback