Youth unemployment is at its highest for twenty years, economic growth teeters above zero and inflation is double the official target. So why, in one respect, are we the economic envy of the Western world?
The holy-grail of government finance, the AAA rating, eluded America this summer. Standard & Poor’s decided that a $14.3trn current deficit was enough to swing the balance out of Obama’s favour. Yet the UK clings on to the coveted credit credential.
And while the fiscal difficulties of the Europe’s periphery are no secret, it emerged this week that France is at risk of a downgrade and even the Wirtschaftswunder came under fiscal-fire.
And while the fiscal difficulties of the Europe’s periphery are no secret, it emerged this week that France is at risk of a downgrade and even the Wirtschaftswunder came under fiscal-fire.
The UK appears to have emerged as an unlikely safe haven for holders of government bonds, with yields falling to 2.5% last week, an all-time low. This means lower debt repayments for the UK government and, ultimately, for the tax payer. Combine this with the erosive effects of 5% inflation and our national debt appears ever so slightly less crippling.
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