George Osborne has been on the back foot throughout the financial crisis. Now the Conservatives' shadow chancellor has been accused of irresponsibility by talking about a potential run on sterling. This criticism is absurd, but it is time Mr Osborne responded to the recession with greater steadiness and a clearer strategy.

Last week, the shadow chancellor noted that if the government was "not careful" about the public deficit, investors could flee sterling. His analysis, however, was quickly condemned by the government as talking down the pound. But Mr Osborne is right. Unless the government has a credible plan to reduce spending in the medium term, it risks problems in the currency and credit markets.