King issues reassurance of sterling's security

Currency exchange traders who are worried about the security of the sterling can be assured by the governor of the Bank of England's recent comments.

Governor Mervyn King has said that there is no danger of a downgrade on the UK currency's AAA status.

Speaking at the Treasury Committee, Mr King said: "I don't believe the rating agencies are concerned, in the sense that they are not re-rating the UK and I would be very surprised if they were to do so."

Economists had been worried that Britain would face an economic situation similar to that in Greece, where the budget deficit spiralled.

While the UK currently has a deficit of above 12 per cent, Mr King has noted that there is a long-term programme in place which will tackle the issue.

Posted by Eleanor Ward

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