Bankrupt Britain?

The Financial Times is reporting that UK Government debt is being traded at prices that suggest that the investors are treating it as less than AAA rated. British bond yields have gone back above Italian yields and are approaching those of Portugal, putting the UK right in among those countries so condescendingly referred to as PIIGS for a time by some who thought themselves superior. As the FT says, Standard & Poor’s, Moody’s and Fitch have indicated that they are unlikely to re-rate the UK before the election but, since the agencies follow the markets in most cases, that's hardly a comfort, and the credit agencies are saying that the debt has to be reduced sooner rather than later.

The cost to the UK of servicing its debt is increasing while other European states are holding steady, and the UK's public debt now exceeds 60% of GDP and is predicted to keep rising. If memory serves, PFI and PPP projects have to be added to that debt figure as well. Some commentators warned as far back as January of 2009 that the debt was unsustainable and a month later the Chief Executive of the Audit Commission warned that debts were at 'Armageddon levels' - and debt has risen since then.

I guess Ted Hawkins isn't the only one searching -