Two elementary mistakes

The warnings from around the world about the scale of the UK’s government debt crisis keep flowing in. Following last week’s warnings from the IMF and European Commission about the scale of the UK debt crisis, credit rating agency Fitch has described the UK as the AAA country most vulnerable to a downgrade. The table at the bottom of the page shows the European Commission’s forecasts for Government deficits as a share of GDP for next year. The UK beats IMF bailout case, Latvia, to head the league table with a deficit level almost double the EU average. The Commission estimates that the UK’s total debt will have almost doubled from 43% of GDP in 2007 to over 82% in just 3 years, moving the UK quickly towards the top of the EU debt league table.

The IMF’s most recent warnings to the UK on Government deficit levels focused on the severity of structural debt problems that the UK has relative to most other developed nations.