IMF Warns Britain’s Soaring Debt Is ‘Testing The Limit’

(Mail) – THE INTERNATIONAL MONETARY FUND (IMF) has delivered its sharpest rebuke yet on the ‘dramatic deterioration’ in Britain’s public finances.

In a major blow to Gordon Brown, the Washington-based fund warned the UK is ‘testing the limit of the market’s confidence’ by pushing the national debt towards 100% of gross domestic product — or close to £1.5 trillion.

If Britain does not do more to tackle public spending, faith in the Government’s ‘solvency’ could be damaged, it said in an economic health check.

That would trigger fears of a collapse in sterling, and a full-blown fiscal meltdown.

The IMF also warned the UK could suffer an economic ‘doubledip,’ where a possible recovery is snuffed out.

House prices have yet to bottom out, despite recent signs of stabilisation, and the outlook for property investment is ‘bleak,’ the fund said.

… (22/07/2009) – Another Warning On Rising Public Borrowing

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3 Responses

  1. […] (17/07/2009) – IMF Warns Britain’s Soaring Debt Is ‘Testing The Limit’ Possibly related posts: (automatically generated)‘Public Interest’ Needs To Be […]

  2. I see a crisis looming. All the ingredients are there. A PM and Chancellor banking on an upturn in the 3rd quarter – just when swine flu starts to peak and another prdeicted bank crisis early next year. And we have no more reserves to call upon. No more bail outs next time. Just misery for everyone living in the UK.
    A June election methinks. And then what? Is there anything anyone will be able to do?
    I guess we all just sleepwalk to inevitable disaster

    • Can’t fault your analysis, Cynical. Latest reports have it that swine flu could reduce Britain’s GDP by some 5% in the autumn. The politicians could not see that one coming; but they seem to be oblivious of what it could mean. And it is still not certain if all the funding directed at the banks has been enough to reduce their exposure to Credit Default swaps. I personally suspect not, and that the government is simply expecting the insurance industry to pick up that tab when it matures. And you are right: nothing left in the bank to bail-out either party when that happens,.. possibly next year.

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