Peter Hoskin

Basket case Britain

Basket case Britain
Text settings

An article in today's New York Times captures the mounting fear and loathing with which the UK economy is regarded.  Here's how it begins:

"LONDON — An island nation that bulked up on debt and lived beyond its means. A plunging currency. And a financial system edging toward nationalization.

With the pound at a multidecade low and British banks requiring ever-larger injections of taxpayer cash, it is no wonder that observers have started to refer to London as 'Reykjavik-on-Thames.'

While that judgment seems exaggerated, there are uncomfortable parallels between Iceland’s recent financial downfall and Britain’s trajectory. Equally important, news that widening bank losses in Britain have necessitated another round of government life support provides a stark example to the United States."

And the New York Times isn't the only prominent American voice to raise the spectre of Reykjavik-on-Thames today.  As the FT's Alphaville points out, Nouriel Roubini - the economics professor whose pessimistic, but accurate, predictions for the US economy have earned him the nickname "Dr Doom" - wrote on his Twitter feed earlier: 'Is the U.K. an Iceland 2? Nouriel is in London to find out.'  Hardly makes you think we're best placed to weather the economic storm, as some would still have us believe...