The budget, today, has to address our dreadful overspending – otherwise known as the deficit. If you keep on borrowing, the amount you owe keeps on increasing, until such time that the lenders cry out, enough.
This is our problem. My favourite economist, Liam Halligan, wrote in the Sunday Telegraph that ‘Courage and conviction needed to tackle the worst crisis since 1976′. I agree with him in the need to sort out our debt, as I’ve written here often before. This graph gives the pictorial image to the sudden scale of our increase in indebtedness.
It’s surely just as sensible to rein back the debt almost as fast as we accumulated it. This is the nub of the argument. I guess we’ll see later just how courageous is our new Chancellor.
As an interesting aside, I commented in January that the bond markets were giving us a stark warning. Well, here’s a view, from Citywire, that one part of the bond market had it wrong on the frailty of UK bonds. Always interesting to read alternatives views on hot issues.