Is the Government about to go pop? If Britain does go to the IMF it would be because the Government fails to find buyers for its debt. And this morning, for the first time in seven years, this happened. It could be a one-off, it could be for technical reasons as yet undisclosed. But given how dependent Brown is on being able to bum money from the City, a so-called buyers’ strike (ie, when investors say ‘we don’t want your crappy debt’) will be hanging over him like the sword of Damocles.
Britain this year will need to raise £180bn according to Ernst & Young, equal to the entire economic output of Ireland. It’s a mammoth task. And this morning the auction of the 4.25% gilts due for maturity in 2049 failed to find enough buyers (ie, “uncovered”), with bids of just £1.6bn
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