Devaluation is a dangerous game. But Britain may have to try it

Our balance of payments situation is so poor that a 10% weakening in sterling would be no bad thing - if there were not such a risk of things getting out of hand

Ever since his first written evidence to the Treasury committee, the governor of the Bank of England, Mark Carney, has hinted that he understands the UK's real deficit problem. This is not the budget deficit, of which chancellor Osborne has made such a fetish, but the balance of payments deficit.

Indeed, that distinguished former permanent secretary to the Treasury and cabinet secretary, Lord Turnbull, recently pointed out that debt owed to citizens of this country is not a problem - and that by not borrowing more for infrastructure at such low rates, Osborne is actually impoverishing future generations. He is, said Turnbull, "playing a dirty game".

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