Feb.20 - The auction of 4G mobile spectrum failed to meet government forecasts, spelling more bad news for Britain's economy as sterling hit a 16-month low. Ivor Bennett reports.
It's supposed to be taking Britain into the technology fast lane. But today 4G sold for a lot less than the government was hoping for. The auction raised just 2.3 billion pounds - well short of the three and a half billion target, and just a tenth of what 3G raised back in 2000. Telecoms regulator Ofcom held the auction. CEO Ed Richards insists making money wasn't the priority. SOUNDBITE (English) OFCOM CEO ED RICHARDS SAYING: "We didn't set out to maximise revenues. The main aim of the auction was to ensure that there would be a competitive market and that services would be available as quickly as possible to consumers and businesses right across the UK." At 1 billion pounds, the auction shortfall is less than 0.1 percent of GDP. but it still makes grim reading for an economy desperate for a boost. Sterling's hit a 16 month low And Tom Elliot from JP Morgan says it'll get worse before it gets better. SOUNDBITE (English) JP MORGAN ASSET MANAGEMENT GLOBAL STRATEGIST TOM ELLIOTT SAYING: "We think there's further weakness for sterling over the rest of the year. It's worth remembering that one of the drivers against sterling is that investors are leaving safe-haven currencies. Of those, sterling has the weakest fundamental macro economic outlook, so it's fallen further." There is SOME good news for the UK. The number of people in work is at an all-time high - rising to nearly 30 million in the last quarter. And January saw unemployment fall much more than expected to a 2-year low. But how long can it last? The Bank of England's certainly not confident. Minutes from its last meeting show it's a lot closer than expected to restarting quantative easing. Desperate times clearly call for desperate measures.