Friday, July 20, 2007
Britain itself metamorphosed into little more than a bank, just as Iceland has become a hedge fund? IMF data show that – on paper – the UK is now the world biggest
tremors are hitting Europe. Hardly junk bonds have been issued for three weeks.Traders are on the sidelines, holding their breath.When the liquidity tide does recede, and beaches the British economy, we will find out what the Brown legacy really is: a bloated state sector that has risen from 37 per cent to 45 per cent of GDP in a decade(on OECD data with taxes to match higher than Germany's; a budget deficit of three per cent of GDP at the top of the cycle, worse than America or Italy; a current-account deficit of 3.4 per cent of GDP; course our own version of America's subprime debacle -yet to hit, although arrears are already shocking.British housing boom will cool, knocking away the interest-rate prop that held up sterling. Global markets will then make a harsher judgment Brownism.