Wednesday, October 08, 2008

Compare and contrast Black Wednesdays

The economic reputation of the Conservatives was destroyed for a decade after Black Wednesday when the pound was forced out of the ERM with the UK Treasury estimated the cost of Black Wednesday at £3.4 billion.

Today Labour has just put at risk £300 billion. Now some of that will be coming back. On Black Weds the amount of money at risk was estimated to be about £27 billion for Bank of England interventions etc.

I don't have the yearly inflation figures to put all this money in real terms but it seems likely that this is about slightly under 10 times the risked capital that supporting the pound on Black Wednesday represented.

The question - what should happen to Labour's reputation after Black Wednesday II ?

Remember we are the most indebted nation in the G8 - and that's before all this started - thanks Gordon.

1 comment:

king of the castle said...

They weren't forced out the ERM they could have stayed in. Have a read of a paper on my website
www.viewfromtheramparts.com Its down at the bottom of the page, marked Black Wednesday