Thursday, December 15, 2011

Banque de France Chief Noyer suggests downgrade for Britain

The Belfast Telegraph, linked here, has the latest news on the growing spat between Britain and France, the opening paragraphs of which are quote herewith:

France's Central Bank chief Christian Noyer has signalled that Britain may be in line for a credit rating downgrade.
His comments, which come a day after President Nicolas Sarkozy was quoted as branding David Cameron an "obstinate kid" for refusing to sign up to a treaty to rescue the euro last week, are certain to further heighten tensions between London and Paris.
France is bracing itself for the potential loss of its coveted AAA rating after two credit agencies last week indicated they were considering marking down countries across the eurozone.
But Banque de France governor Christian Noyer said they should instead be looking at the UK because of the scale of debt and inflation and the poor levels of growth and bank lending on this side of the Channel.
Mr Noyer told Le Telegramme newspaper that a downgrade for France - which would drive up the interest Paris pays to borrow and make loans in the wider economy more expensive - "doesn't strike me as justified based on economic fundamentals".
"Or if it is, they should start by downgrading the UK, which has a bigger deficit, as much debt, more inflation, weaker growth and where bank lending is collapsing," he added.

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