Noyer: France safer than UK

Julian Harris
Follow Julian
FRENCH central bank chief Christian Noyer lashed out at the UK economy yesterday, saying Britain’s sovereign should be downgraded before any cut to France’s gold-plated credit rating.

Noyer’s unexpected attack drew responses from Number 10 and the Treasury. Prime Minister David Cameron pointed to the “credibility” granted by the UK’s low bond yields and his government’s plans to reduce the mammoth annual deficit.

A Treasury source told City A.M. that “markets clearly don’t agree” with Noyer’s assessment.

Noyer earlier said that the UK had “more deficits, as much debt, more inflation, less growth than us,” claiming that rumours of a French downgrade revealed “irrational” behaviour at credit rating agencies.

“They threaten even when states have taken strong and positive decisions,” Noyer said. “One could think that the use of agencies to guide investors is no longer valid.”

“Otherwise, they should start by downgrading Britain,” he said.

Yet France’s woes look likely to continue after its statistics office said that the economy is entering an official recession. Insee expects a 0.2 per cent contraction this quarter, and a 0.1 per cent dip next quarter.

Meanwhile Noyer’s compatriot Christine Lagarde, head of the IMF, said that no country is immune from the “escalating” Eurozone crisis. Lagarde said the outlook for the world economy is “quite gloomy” and warned that failure to act collectively could lead to protectionism and isolation reminiscent of the 1930s.


CHRISTIAN Noyer appears to be the typical establishment statesman. Born in the French capital in 1950, Noyer also graduated in Paris having studied law. Following a spell of military service in the French Navy, he swiftly signed up at the École nationale d'administration – essentially a training camp for people who, believe it or not, aspire to becoming bureaucrats. The school clearly did the trick for Noyer, who has spent the subsequent decades adding to his portfolio of official roles. After starting at the French Treasury in the mid-1970s, he had a two-year stint in Brussels in 1980; and in 1998 his European adventure extended to Frankfurt, becoming vice president of the new European Central Bank (ECB). He has also held positions at the OECD, the G7, G10, IMF and World Bank. Perhaps not the kind of person one would expect to let go a heated tirade attacking the UK’s credit rating.