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UK national debt set to surpass £2 trillion

The national debt is likely to be exceed £2 trillion following the Treasury’s decision to stand behind Britain’s troubled banks’ debts. The latest Government figures emphasise fears about the impact of the crisis on the taxpayer and may spark further anxieties over Britain’s creditworthiness.

The Office for National Statistics confirmed that it now considers both Lloyds Banking Group and Royal Bank of Scotland to be public sector companies and expects to have to add between £1 trillion and £1.5 trillion to the UK’s public sector net debt, taking the total national debt to an unprecedented £2.2 trillion – just under 150pc of gross domestic product. This would be the worst debt total since the 1950s, when Britain was in the process of paying back its war debts.

At the same time, the prime minister warned in Rome that the world was being hit by an “economic hurricane”. This is just an attempt to excuse the failure of his own policies. Economic hurricane my foot! Just because nearly every government in the world has been following more or less the same daft policies does not make the consequences a global event, as if it was caused by a toxic cloud of interplanetary dust.

Of course when the big nations get themselves into trouble everyone is going to be affected but any country running a prudent and sound economic policy could have avoided the worst of this. The British squandered their tax revenues in the good times, promoted the idea of making money by moving it from here to there and back again, allowed a housing bubble to develop.

Read the full article in the Daily Telegraph here