Insolvency up

I find that Americans who are aware other economies exist have one source of comfort: the US is in bad shape, but the UK is worse.

That's the view of Martin Wolf writing in this morning's FT and if this morning's bankrupcy figures ae anything to go by then it is hardly suprising.

If you haven't as yet heard the news,the last three months of 2008 saw 2,428 corporate insolvencies,that is up 220 per cent on the same period in 2008 and added to that individual insolvency were up 19 per cent.

Back though to Martin who makes the point that

the UK entered the current crisis with one of the largest structural budget deficits in the industrial world and a bigger public debt than most; it had also done less to reduce debt and borrowing than most since 1997;

But feels that Gordon Brown's fiscal solutions are correct though with the risk that

If the economy were also to follow the path of Morgan Stanley’s “pessimistic case” – under which GDP in 2012-13 would be only marginally higher than in 2007-08 – the current budget deficit would remain close to 8 per cent of GDP, despite the squeeze on public spending. Net public debt would then be on its way to more than 100 per cent of GDP. It is hard to believe the government of an open economy could get away with this in peacetime.

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