How Brown plans to borrow more money than the market would ever let him

In PMQs today, Gordon Brown described the era of nationalised banks as a “wholly new world”. How right he is. The collision between the worlds of politics and banking has created much potential for mischief and I look at some of it in my political column for tomorrow’s magazine including what for me is the single most chilling development since the nationalisations started – but I’ll save that for when the magazine comes out tomorrow.

For now, I’d like to share with you another suspicious aspect. For a while in Coffee House we’ve been saying that the markets wouldn’t let Brown borrow more: what if the Arabs and Chinese tire of buying all the debt? This presumed Brown’s hands would be tied by the market. But, as so often, I underestimate him. Now he has his new toys, he can tweak banking regulations to have the nationalised British banks buy his crappy debt instead, and thereby divert the nation’s savings into the Treasury’s coffers.