LONDON - Britain is the fourth-most indebted country in the world, with higher aggregate borrowings than Argentina, which had to have a debt refinancing, and the US, where the budget deficit has been dragging the dollar down to historic lows.
A study by economists at ING, the Dutch bank, says
Britain is borrowing nearly twice its annual GDP, taking into account borrowing by companies and individuals as well as Government debt.
They warn this indebtedness could be a drag on growth.
Only Japan, the Netherlands and Israel are more deeply in debt.
The United States, by comparison, has total borrowings of around 125 per cent of GDP.
And Argentina, which caused a world crisis when it said it could not pay its debts in 2002, has borrowed only 70 per cent of its annual GDP.
This is also in sharp contrast to the positive picture painted by Chancellor of the Exchequer Gordon Brown in the Budget last Wednesday.
Then he said he expected total Government net borrowing for the current financial year to be just 34.4 billion ($88.7 billion) - though figures released on Friday indicated this may be an underestimate and that total net borrowing may actually be about 36 billion.
But it is not Government debt that is the problem - it is household borrowing, which soared above the 1000 billion mark last year.
Figures last week showed British households were still borrowing heavily. Total net lending by members of the Council of Mortgage Lenders was 17.2 billion last month.
- INDEPENDENT
