WSJ:BOE King: Sterling Rally No Surprise; Pound Still Helping Economy
LONDON (Dow Jones)--The recent strengthening of sterling isn't a surprise given the troubles in the euro zone, Bank of England Governor Mervyn King said Wednesday.
King told reporters following the publication of the central bank's quarterly inflation report that the economy is nevertheless still benefiting from the pound's near-25% devaluation against rival currencies in 2007 and 2008.
"There is no doubt that the big depreciation...is a vital part of rebalancing, an absolutely essential part," King said, referring to a hoped-for adjustment of the economy away from debt-fueled consumption towards exports and investment.
The U.K.'s mix of loose monetary policy and tight fiscal policy is the right approach to nurturing recovery, he added.
-By Jason Douglas and Paul Hannon, Dow Jones Newswires; +(0) 20 7842 9272; jason.douglas@dowjones.com
