HSBC warns of hot money exodus from Britain under 'siege'
By Ambrose Evans-Pritchard
Last Updated: 10:35pm BST 05/10/2007
HSBC, Britain's biggest bank, has warned that Britain faces a stark "de-rating" by investors in coming months as growth slows and funds begin to
lose confidence in the country's economic management, triggering a mass exodus of "hot money" from the City.
Events such as the Northern Rock debacle have eroded confidence in Britain's economic management
"Sterling's outlook is increasingly taking a turn for the worse. A deeper downward move against a broad range of currencies is on the horizon,"
said the bank in a new report, "Kingdom Under Siege".
It expects the pound to fall from around $2.04 to $1.76 against the dollar over the next eighteen months, even though the dollar itself is in danger
of losing its status as the world's "anchor currency".
Well, what's this? US$ is losing its worth, now British pound is endangered... Meanwhile, Dow Jones and other stock markets are skyrocketing. I
don't understand it at all. Anyone with some knowledge on economics here? Care to explain this phenomena?
