Britain at risk of worse deficit crisis than Greece in the EU

February 19, 2010 by · Leave a Comment
Filed under: Currency News 

The Euro has been taking a beating after the news of Greece did not seem to calm investors and now these numbers from the UK showing there deficit is going to be even larger than projected this year.  With this waning confidence in all other currencies and strength in the U.S. dollar, it is looking more and more likely that we are not seeing a recovery and instead this bear market rally is over and now it might be time to retest lows set in March last year.  Very interesting times.

In surprise news which sent the pound sliding on Thursday, official figures showed that the Government borrowed £4.3 billion last month.

It was the first time since 1993 that the public finances had gone into the red in January – a month in which tax revenues usually push the Exchequer into the black.

Economists said that the scale of the shortfall in the budget could this year mount to above £180 billion – higher than even the Chancellor’s forecast of a record £178 billion.

Such a deficit would, at 12.8 per cent of British gross domestic product, be even greater than the deficit faced in Greece, which is facing a full-scale fiscal crisis and may need to be bailed out by fellow euro nations or the International Monetary Fund.

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