One of the reasons suggested for the latest bout of sterling weakness is the nationalization of Northern Rock. US investors in particular are said to have been spooked by the pictures of people queuing to withdraw their funds in panic when the crisis broke and now won’t touch UK assets with a bargepole. Given the US sub-prime mess, though, you have to wonder how sound their judgement is.
I asked back in September why the UK’s apparently socialist government hadn’t stepped in and discreetly taken Northern Rock into state ownership, or at least provided the same support that has been extended to banks previously, before the panic spread.
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