Two stories in the papers today illustrate just how badly placed Britain is to get through this recession. In The Times, Patrick Hosking speculates about the possibility of Britain losing its triple A credit rating now that the Bank of England has resorted to quantitative easing. He notes that Moody’s has said that Britain’s triple A rating is now being “tested”. Other advanced economies have lost this rating before and survived, but making borrowing more expensive in the current circumstances would be yet another blow to the public finances as well as a national humiliation.
Heather Stewart in The Guardian flags up an IMF report on how much of their GDP countries had spent on bailing out the banks by the middle of February.
“It calculates that the UK has spent as much as 19.8% of its GDP, topping the table of G20 countries. The US, where the investment bank Bear Stearns and the insurer AIG have both been rescued with public finds, has spent just 6.8% of its GDP. Only Norway has come close to the UK, spending 13.8%.”
At the beginning of this crisis, Gordon Brown liked to claim that Britain was uniquely well placed to get through it. But the evidence is piling up that the reverse is actually true.
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