Sterling is likely to remain weak against both the dollar and the euro for the “forthcoming future,” according to former editor of the Sunday Times and BBC broadcaster Andrew Neil.
Speaking at the Advantage conference in Heathrow, Neil predicted the pound is unlikely to rise against either currency soon largely due to the UK’s debts. He added: “If I was in your business I would expect that sterling against the euro and the dollar will remain weak for the forthcoming future.”
He said many people working in the financial sector believe the pound will once again hit parity with the euro and may be worth as little as $1.50.
Neil said the next general election will take place on May 6 2010 and Gordon Brown is likely to remain as Prime Minister until then.
The Conservatives are likely to win the next election, he believes, and an emergency budget will see VAT raised to 20% by the new government next summer. Neil predicted the Tory shadow chancellor George Osborne will blame the need to increase VAT on the outgoing Labour government.
He added: “He (Osborne) will say he’s seen the books now he’s in the treasury and it (the state of the nation’s finances) is much worse than he thought.”