Outgoing Bank of England(BoE) governor Sir Mervyn King said last night the pound is now "properly valued" in a move to halt its slide.
Sounding the alarm following a woeful start to the year for sterling which has seen it plunge in value against currencies including the dollar, King moved to halt the slide, as commentators start to fret over the impact on households and inflation.
He told ITV News: "We are moving to a properly valued exchange rate. I think we're probably there".
"Basically we are at the same level [of sterling] we were after the impact of the financial crisis.
"We are certainly not looking to push sterling down. Weare looking to ensure recovery in the UK economy and gradually bring inflation back to our 2% target."
The governor's words are a reversal from comments in the autumn and earlier this year. In November, he said sterling's rise in 2012 "was not a welcome development", before reiterating in January that the 25% fall in sterling since 2007 before its rise last year "was certainly necessary for a full rebalancing of our economy".
King was also more upbeat about the UK's prospects. The governor said the economy was about to start growing again. "There is momentum behind the recovery that's coming," he said.
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