Despite Britain’s wholehearted commitment to destroying the Euro the pound is once again falling against that currency. To compare Britain’s financial situation to that of Greece is flattering: Goldman Sach’s machinations in Greece notwithstanding, Britain is second to none in the art of off the books accounting. We are running major wars out of a secret contingency fund, printing money to shore up our banks as off the books emergency funds and deferring  costs on infrastructural projects of dubious quality and great expense run for the benefit of friends of New Labour. No one knows the true state of our finances: we know only that they are unimaginably bad. To add to our woes we are outside the Eurozone and face an Iceland style collapse, including debts owed in foreign currencies which we can never conceivably cover. Unlike Greece we have no political will to remedy the situation unless you consider a war against our creditors to be such a remedy.

Sean O’Grady

Independent

19th February, 2010

Britain’s public finances are in a worse position than those of Greece, according to the latest figures on government borrowing. The Office for National Statistics said yesterday that January alone saw a net shortfall of £4.3bn, far worse than City forecasts and in a month which has always previously shown a healthy surplus. It puts the UK on track for a deficit of £180bn this year, or 12.8 per cent of GDP, economists said, shading the Greek figure, hitherto the worst in the European Union, of 12.7 per cent. In the pre-Budget report the Chancellor forecast a deficit of £178bn for the current year. Warnings that the UK could face a Greek-style crisis of confidence have been building for some weeks, and yesterday saw a sell-off of sterling and British government securities, or gilts, on the disappointing news.

Read the rest of this entry »