At a few minutes to one o’clock today the country’s fate passed from the Chancellor and was cast on the waters of the money markets. Public borrowing will be £175bn this year and £173bn the following year.
From the very start of the crisis the Government has consistently underrated its severity. Even so, Britain will proportionately be borrowing more than any other G8 country.
Are the funds out there to meet the colossal requirements of G8 countries? Where do we rate in the international league tables as to whom colossal sums should be lent?
In these very early stages the Government is finding the gilts market sticky when it comes to issuing its endless new tranches of debt. What happens if the gilt market proves itself even more difficult in coming up with the funds for the gilt floatations? At some stage, maybe soon, gilts will be sold at lower prices, thereby pushing up long-term interest rates and damaging the recovery.
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