UK Currency Crisis: Toward Emerging Market Status

cc Flickr judy dean, modified, https://flickr.com/photos/peterscherub/51852664447/in/photolist-2n13sBZ-2mZU7SE-9JspXi-eaRSrx-eaRScK-eaRTZP-21qWiEq-eaRTJp-HmF6Em-2nPmaWU-2jTGkaN-2jTGks1-TwLceZ-2jJ4Cos-2jDtM41-4icUAV-HwRKjA-p7qXuw-pR3SSQ-67nNta-p7rbgd-5hDM45-p5qLou-9nScnu-2mZFNsg-6SKbZG-6SKbQG-wKhGwb-2nPnKjx-8puuqx-YB5wRu-GZBaWn-H6E6Sc-7e9ARv-a9idKB-w7KHtd-XLWD8G-owqRxZ-GZB3cz-KuvPE2-wYQr2C-8putCp-H3G2PY-8pxDRo-8puwXg-tiW4sJ-gte8q9-8purRn-gfgyLd-8usFao

Back in August, Saxo Bank’s Christopher Dembik noted that the United Kingdom was “more and more looking like an emerging market economy.” His logic was simple: in terms of fundamentals, the UK outlook displays the kind of economic vulnerability typical of the developing world, and the only thing insulating the country from a currency-crisis-IMF-adjustment loop was the ongoing willingness of market players to hold onto sterling holdings, likely on the basis of a lingering perception of UK economic resilience.

 

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