As yet no one has suggested that this level of borrowing is wrong-headed, or has questioned whether it is achievable, but let's face it.
Who from the world's cash-holding countries will be tempted to hold their funds in sterling where the currency is prone to slides, and has no prospect of reaching fiscal stability at all, let alone over the business cycle?
Brown's whole plan depends on foreign lenders being willing to fund him for years to come, and the signs are already there that they ain't buying the story, with demand for British Government Gilt-Edged Stock already tiring (See HERE) The rates of interest on offer on 'Gilts' have recently had to be raised to 1% above LIBOR, and the Bank Of England has had to make embarrassing appeals to buyers about the dependability of the British government since 1694 when gilt-edged sales first started.
The signs of buyer fatigue are already visible at a point when the government has sold GBP 77 billion of stock so far this year but it still needs to sell another GBP 70 billion to fund the current year's deficit. But what if Brown seriously tries to sell GBP 250 billion or more next year?
It seems most unlikely that Brown will have a chance of raising the money he will need, without a bail-out. But how would the IMF raise the money to tide him over, when they have so many other countries also close to the edge?
Brown's whole plan depends on foreign lenders being willing to fund him for years to come, and the signs are already there that they ain't buying the story, with demand for British Government Gilt-Edged Stock already tiring (See HERE) The rates of interest on offer on 'Gilts' have recently had to be raised to 1% above LIBOR, and the Bank Of England has had to make embarrassing appeals to buyers about the dependability of the British government since 1694 when gilt-edged sales first started.
The signs of buyer fatigue are already visible at a point when the government has sold GBP 77 billion of stock so far this year but it still needs to sell another GBP 70 billion to fund the current year's deficit. But what if Brown seriously tries to sell GBP 250 billion or more next year?
It seems most unlikely that Brown will have a chance of raising the money he will need, without a bail-out. But how would the IMF raise the money to tide him over, when they have so many other countries also close to the edge?
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