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Jeremy Warner: Pity Gordon Brown, who sacrificed Britain's riches
By Jeremy Warner
The Telegraph, London
Wednesday, March 19, 2025
Poor old Gordon Brown. There were many positives about his time as Chancellor, which compared with today seems like a golden age of above-trend growth, tame inflation and relative stability in the public finances.
He was also instrumental in keeping the UK out of the euro, and played a key role in galvanising a global response to the financial crisis, thereby arguably preventing the world economy from sliding into a second great depression.
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But one thing he will also forever be remembered for was the wholly unnecessary, not to say completely unfathomable, decision to sell off nearly half of the nation's gold reserves at a time when prices were near multi-decade lows.
He will no doubt have been reminded of this historic blunder on seeing the gold price surge to a new all-time high of more than $3,000 per troy ounce this week.
Between 1999 and 2002, the UK sold 395 tonnes of gold at an average price of $275 per ounce to realise a grand total -- much of which was reinvested in euro and dollar-denominated securities -- of L3.5 billion. Today, those same reserves would be worth $38.5 billion. By any measure, this must count as one of the worst investment decisions in British economic history.
What made the decision doubly worse is that the intention was pre-announced, causing the price to move violently against the seller. Overnight, it became a buyers' market.
Over the years, numerous conspiracy theories have been advanced to explain the decision.
One was to bail out bullion banks, some of which had been borrowing or shorting gold to invest in higher yielding assets – the so-called "gold carry trade." Another was to prop up the still nascent euro; an attempt, in other words, to demonstrate support for Europe's monetary union even though Brown had little intention of joining it. ...
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