This presumably costs even more what a fiddle !
Meanwhile Rome burns .Duncan at Duncan`s Economics Blog sketched the scale of conflagration before the budget. ‘Assume GBP hits 100%, and cost of government debt (in terms of annual interest) rises to 6% (currently less than 3.5% and probably will be for a while but in the longer term that may well rise).Then the government will need to spend 6% of GDP annually on interest payments (currently closer to 2% of GDP before the new borrowing).Tax is currently about 37% of GDP and government spending will be around 45% of GDP If we want to hold the debt ( not pay it off) then we need to find an additional 12% of GDP (the extra interest payments and balancing the budget).12% of GDP ..would mean cutting about 25% of all public spending. .....or about a 30% increase in taxes’
Oh and by the way ,according to the IMF, we are going to have our economy shrink by 4.1% this year, and 0.4% in 2010. , if the IMF is right then we will not have 3.5% growth in 2011 either, meaning that borrowing will rise even higher than already predicted.