The Great Debate UK
- Anthony J. Evans is assistant professor at ESCP Europe business school. He will participate in a Reuters pre-budget live blog on Dec. 9, at 12 p.m. British time. The opinions expressed are his own. -
The main issue underpinning Britain’s next pre-budget report is the state of the public finances. Let’s be clear – they’re dire.
The budget deficit may well exceed 200 billion pounds this year, contributing to a net public debt of over 800 billion pounds (i.e. 60 percent of GDP).
Some credit rating agencies have already cast doubt whether UK gilts can maintain their triple-A status, but if investors do turn their back on government debt there’ll be little advanced warning – this possibility needs to be anticipated, and acted upon, now.