Chancellor Alistair Darling said that some countries were worried about the effects of the falling dollar but that policymakers in
Asked about possible calls to stem the dollar’s weakness at Saturday’s meeting of Group of Seven finance ministers and central bank governors, Darling told Reuters in an interview: “Undoubtedly there are a number of countries that are concerned, but for our part we don’t comment on individual countries’ exchange rates.”
Turning to the global economy, Darling said: “We are going through a very difficult time, but we can get through this.”
G7 financial heads meet in Tokyo on Saturday to discuss the global economy amid U.S. recession fears, international market turmoil and exchange rate swings.
Darling earlier played down the prospect of any coordinated steps to boost global growth at the G7.
“The first thing is that conditions in different countries are not the same,” he said.
While aggressive interest rate cuts in the United States and U.S. President George Bush’s fiscal stimulus package were appropriate there, he said, “other countries are not in the same position.”
On ailing British mortgage lender Northern Rock, which the government is looking to sell, Darling rejected the notion that the government would favour any particular bid.
“There are two sets of proposals, and we are considering them both equally,” he said. “The option of temporary nationalisation remains on the table.”Â
Britain’s Office for National Statistics has classified Northern Rock’s debt as a government liability, which would be tantamount to adding about 25 billion pounds to government debt.
Asked if this meant the government had broken its own fiscal rules concerning its net debt, Darling said: “The code for fiscal stability which we established over 10 years ago made it clear that in exceptional circumstances this sort of thing might happen, so no, it doesn’t make a difference.
“Most people will look at Northern Rock and see that this is exceptional.”
Britain suffered its first bank run in more than a century last September when Northern Rock was forced to seek emergency funding from the Bank of England. The government has since lent the bank around 25 billion pounds and is now considering the two bids for the lender.
On the British housing market, Darling was sanguine despite recent falls in prices. He said the situation in Britain was completely different from that in the United States, where the market has slowed sharply due to subprime mortgage problems.
“In America, the supply of houses vastly exceeds the demand. In Britain it is the precise opposite, and demand for houses is greater than the supply, which is underpinning prices.” (Reuters)
Â
