Secondo Regno Unito più a rischio di crisi del debito di tutte le principali economie
UK second most at risk from debt crisis of all major economies
di tylerthe-theatre
Secondo Regno Unito più a rischio di crisi del debito di tutte le principali economie
UK second most at risk from debt crisis of all major economies
di tylerthe-theatre
12 commenti
France is seen as the highest risk of a bond market sell off in the next two years.
Hopefully, for the U.K., Reeves realises that stimulating the economy and promoting growth is the safest way out of the current situation.
Better late than never.
Meaningless analysis.
The UK faces zero probability of forced default on its nominal promises made on its liabilities, all of which are denominated in sterling that it issues.
A “debt crisis” is therefore meaningless for the UK. It’s a category error to try and ascribe the concept to the UK.
The UK government and Bank of England (which is legislatively subordinate to the Treasury and Parliament) is sovereign and can **always** stabilise any gilt market volatility if it chose to do so. At **no** point can the gilt market actors unilaterially disrupt the government’s debt managment and fiscal policy – they can only do so to the extent allowed by the very government this article implies faces a debt crisis.
France is in a materially different situation though. It does not have monetary sovereignty as it adopted the foreign currency, the Euro, 25 years ago. The issuer of the credit unit in which its liabilities are denominated is the ECB, with primary infrastructure laying in Germany and its political and legal authority laying in Brussels at the EU level. This really does make a difference and, like Greece, it can indeed face a nominal “debt crisis” if it fails to meet obligations via taxation revenue, etc. It is subordinate to interest rates being determined by their creditors whereas the UK is not. It sets the interest rate in sterling. It might allow the gilt yield curve to float for various reasons. But this is a choice. It can always re-enforce its power. This doesn’t automatically result in negative economic outcomes either and there is a whole scope of policy options in these scenarios that the UK gov can take that are not available to the French government (while it remains bound by its EU treaties and common currency constraints).
UK being flagged as second-most at risk of a debt crisis sounds scary but it’s really about investor confidence and inflation risk not some magic “debt limit”.. The country issues its own currency, so the real constraint is whether the economy can handle extra spending without prices running wild..
Right now, debt servicing costs are rising because of index-linked gilts and high rates so it makes sense to focus on targeted public investment .. like housing, energy and infrastructure .. to boost productive capacity rather than just slashing spending.. That’s what keeps growth sustainable and inflation in check..
We really are useless. Can’t even be the best at being the worst!
At least the UK has the option of inflating away its debt. I’m not sure what France can even do being part of the Euro.
Most of the developed countries are at risk, US actually has it the worst, the only actual solution is to inflate the debt away by money printing. Once US implodes, all other countries will do so and we will get double digit inflation.
Well , given the solution to everything in this country is raise taxes and raise spending .. no fucking shit !
We’ve literally been robbed by the ruling class for decades and it just keeps getting worse. Who would have thought 🫠
Centuries of work and genius and invention and civilization building and somehow the nation is going belly-up…
>*”This island is made mainly of coal and surrounded by fish. Only an organizing genius could produce a shortage of coal and fish at the same time.”*
~ Aneurin Bevan 1897–1960, British Labour politician; Blackpool, 24 May 1945.
This is due to George Osborne in one of his less-lucid moments having the hare-brained idea to tie absurd amounts of govt borrowing to inflation. He was asked about it recently and replied with a “Not my problem”.
I think they already have their plan.
– Introduce ID cards at the cost of billions. Most likely giving it to Oracle owner, Tony Blairs friend.
– Make everyone use ID cards when opening bank accounts, savings, trading accounts, etc. Giving clear visibility of every account linked to each person. This will stop people with savings receiving benefits. This will help with a reduction in costs, whilst also generated an increased income from those who don’t declare interest and stocks/share earnings.
– Make our economy cashless. This will coincide with the ID cards, as tradesman, etc, will no longer be able to offer cash in hand jobs, and the GOV will have full visibility of their accounts. Thus increasing the tax generated.
How about investing in business. Why are we so shit at allowing business to flourish.