French central bank chief mocks British economy

15th December 2011, Comments 0 comments

The head of the French central bank criticised the British economy on Thursday, arguing that ratings agencies are targeting the wrong country for a debt downgrade.

"They should start by degrading the United Kingdom, which has greater deficits, as much debt, more inflation and less growth than us," Christian Noyer told the regional newspaper Le Telegramme.

Noyer warned that Britain, which clashed with France at last week's EU crisis summit and refused to join the members of the eurozone single currency bloc in a new fiscal pact, was facing a credit crunch.

Ratings agencies Standard & Poor's and Moody's have warned that France is close to losing its triple-A debt rating over fears that eurozone members can not control their rising debt and deficits.

Britain, which is outside the euro and which has the Bank of England to act as a lender of last resort in the event of debt problems, is seen as a safer borrower by the markets despite economic problems of its own.

Fitch, a French-owned ratings agency, has warned London its triple-A is at risk if further shocks hit the economy.

Fitch predicts Britain's debt will peak at 94 percent of gross domestic product, above Germany at 83 percent and France at 92 percent.

Noyer also claimed that France's banks were better capitalised than many of their European and American rivals.

© 2011 AFP

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