Budget increases prospects of revalued Green Pound

by FWi staff

YESTERDAYS Budget quickly prompted fears among the farming community that Sterling would strengthen and result in a revaluation of the Green Pound.

Sterling is only halfway through the first of a possible five 10-day-long confirmation periods. But although there were no budget provisions specific to agriculture, there is already concern that the Green Pound could be re-valued on May 3.

Financial analysts following say that a revalution of 3.2% is increasingly likely if Sterling maintains its current strength.

The Pound rose to DM3.05 against the German Mark soon after Chancellor Gordon Brown delivered his speech to Parliament yesterday afternoon. And at mid-day today, had eased only slightly to DM3.044.

According to economists at the Home-Grown Cereals Authority, the market expects that the Bank of England will raise interest rates to offset the City perceives as an inflationary budget.

Any such a move is unlikely to worry the Government, which effectively washed its hands of the matter when it passed responsibility for adjusting interest rates to the Bank of England last year.

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