The price of Benn
Sir: Tony Rudd's piece (13 June) attributing the recent collapse of sterling to the emergence of Mr Benn is pure fantasy. If he really believes that investors have sold sterling in the face of multiple contingencies (that the leadership of the Labour Party will be up for grabs before the next general election, that Mr Benn will win that contest, and that he will go on to win the general election), contingencies which cannot bring Bennery to power much before 1984, which cannot yet be said to be likely to happen, and which are themselves subject to the influence of two uncertain factors (the success of Mrs Thatcher's economics and of the SDP), then he must mix with some pretty unsuccessful international investors.
In fact, Mr Benn's emergence was not 'the only news' that week. There was also the Mexican oil price reduction, which was immediately seen to pose a threat to the price of North Sea oil and so to our balance of payments. All of a sudden, the pound's petrocurrency status, which had encouraged investors to stick with sterling despite the interest-rate differential, looked a lot less secure. mat is why the pound took a dive below $2.
Peter James Springfield House, West Clandon, Surrey
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