Expert says “highly unlikely” that Greek crisis will occur in Britain

Date: April 30, 2010

- Bolsom says important not to “scaremonger or overstate the likelihood” of it happening in Britain-

With the eyes of the world on Greece and the Eurozone, the markets are understandably jittery that a similar situation could happen in the UK. Fears of a downgrade to our triple AAA credit rating continue to haunt the markets in Britain.

City expert Mark Bolsom, Head of the UK Trading Desk at Travelex, thinks that although there are some parallels, some subtle differentiators dampen the likelihood of the Greek crisis occurring in the UK:

“It is important not to scaremonger or overstate the likelihood that this will happen in the UK, as some political commentators are doing. Firstly, the pound gives the UK an important advantage. If crisis does hit, we can devalue our currency in order to boost exports. As one of 12 member states belonging to the euro, Greece does not have that option.

“Secondly, our debt looks very different to Greece’s. The UK’s stock of debt is a lot lower than theirs and is older - which means that this year, the UK government will need to raise less new debt than any of its Eurozone counterparts- including Germany and France.

“Thirdly, attitudes towards tax are very different in both countries. Unlike the Brits, the Greeks are famously relaxed about paying their taxes. According to the World Bank, one third of the Greek economy never reaches a tax return, balance sheet or any other form of written record.”

Bolsom concludes, “Whilst sterling will continue to be affected as markets fear contagion from Greece, I think it very unlikely that such a crisis will occur in the UK.

“I expect sterling to remain weak throughout much of this year, ending the year at around €1.17 and $1.55. Sustained low interest rates will serve to keep the pound under pressure against a basket of major currencies.”

- Ends -

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Jessica Buttress
Head of PR for Travelex Global Business Payments UK
0208 415 4204
077954 497129
Jessica.buttress@travelex.com

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About Travelex:
Founded in 1976, Travelex is the world’s largest non-bank foreign exchange and payments specialist; with operations across four continents and 6,000 employees worldwide.

Travelex holds key positions in its three main areas of activity: Global Business Payments (TGBP, which includes Travelex Personal Payments), Currency Services and Card and Mobile Payments. Every year, more than 35,000 corporate clients and 30 million customers trust Travelex to manage their foreign exchange requirements.

Recently recognised by TowerGroup research as Industry Leader for payments innovation for SMEs, Travelex currently handles international payments worth £40 billion annually for over 750 large corporate and financial institutions.

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