Gordon Brown’s gold blunder price Britain £48bn as value hits file excessive | Personal Finance | Finance | EUROtoday

Gordon Brown’s  catastrophic resolution to unload Britain’s gold reserves has price the nation a staggering £48billion, the Daily Express can reveal. The former Labour Chancellor flogged greater than half the nation’s gold holdings between 1999 and 2002 at rock-bottom costs, simply as the valuable steel was about to embark on a historic 25-year bull run. The scale of Mr Brown’s catastrophe has been laid naked as gold hit file highs of round £3,700 per troy ounce this week, with consultants warning Britain is now dangerously uncovered to dangerous US authorities bonds reasonably than the safe-haven asset. Shadow Chancellor Sir Mel Stride stated: “When Labour sold Britain’s gold at the bottom of the market, that wasn’t bad luck. It was bad leadership.” He added: “The cost of that disastrous decision is still being paid by the British people.”

Analysis reveals the gold was bought for round £2billion in proceeds, roughly £4billion when adjusted for inflation. Today, that very same gold could be value roughly £48billion. Callum McGoldrick, investigations marketing campaign supervisor on the TaxPayers’ Alliance, stated: “Gordon Brown’s decision to sell off the nation’s gold reserves at a historic low price was a staggering act of fiscal mismanagement that has cost the UK tens of billions of pounds.”

He added: “This was a short-sighted move that prioritised short-term cash over long-term national wealth. It is a stark reminder of how poor economic stewardship can have devastating long-term consequences for taxpayers.”

Lindsay James, funding strategist at Quilter, stated Brown started promoting “within three months of what now stands as a 25-year low point, on the cusp of a decade that would usher in the bursting of the tech bubble and the global financial crisis.”

She warned: “It is clear that the UK now has more meaningful exposure to US government bonds at a time of rising US government indebtedness, a falling dollar and weakening institutions.”

The disastrous selloff will probably be remembered as probably the most notorious financial blunders in British historical past, with critics dubbing it “Brown’s Bottom”, a reference to the rock-bottom costs at which he flogged off the asset. At the time, gold had roughly halved in worth over the earlier 20 years, main Brown to consider diversifying into different belongings made sense. The proceeds have been reinvested in sovereign bonds, with the earnings reinvested over time.

But the timing proved totally catastrophic. Just months after Brown started promoting, gold costs began their meteoric rise, pushed by world monetary crises, the collapse of Lehman Brothers and rising considerations in regards to the stability of Western establishments.

Ms James added: “Whilst gold has exceeded all expectations in recent years, its rise is an important reminder that long-held assumptions, including that the dollar will remain unchallenged as the global reserve currency and the US will remain an ally of the West, do at times need challenging.”

The selloff was a part of a wider pattern amongst central banks on the time. Many governments have been offloading gold reserves, believing the valuable steel was a poor funding in comparison with interest-bearing belongings. There was even a Central Bank Gold Agreement to coordinate gross sales and stop costs from crashing additional.

Julian Jessop, economics fellow on the Institute of Economic Affairs, defended Brown’s resolution, saying it “made sense at the time because gold, which accounted for around half of the UK’s official reserves, had performed poorly as an investment for many years.”

He added that the launch of the euro in 1999 “provided an opportunity to diversify the UK’s reserves into a new currency which was widely expected to rival the US dollar.”

The proceeds have been additionally reinvested in belongings that paid curiosity, producing further earnings for the Treasury.

But for critics, Brown’s blunder stays a permanent image of Labour financial mismanagement, a multi-billion-pound mistake that has disadvantaged Britain of a monetary cushion exactly when world uncertainty is at its highest.

With gold now at file highs and US authorities debt spiralling, questions are as soon as once more being requested about whether or not Britain made the suitable name in abandoning the last word safe-haven asset.​

​The Treasury declined to remark.