AUTOREFRESH 
UK Economy: Austerity Vs Stimulus
By Sean Lee || January 31, 2012 at 00:14 GMT
|| 4 comments || Add comment
This opinion piece from Bloomberg rightly points out that we shouldn’t judge the UK’s austerity program by GDP alone. Remember that many western economies include new spending as a significant percentage of GDO so obviously any economy undergoing an austerity plan is going to suffer in this department. The cost of insuring the UK’s Sovereign debt has fallen sharply relative to other European countries, and this should also be taken into account when judging success/failure.
thank you Sean!
Sean, I read the other day AEP’s piece on UK that talks about the combined massive debt of UK comparing with other countries. Agreed that UK has its own Central Bank and currency, and taking some Austerity actions to reduce debt. But with growth negative and borrowing still high, how can they alone have AAA, still? I am bearish pound for this year. Please advise. Thanks.
Comparing the UK which has it own currency and Italy and France seems a bit disingenuous to me. I think a better comparison would be with the cost of austerity on British society as a whole. The people who commented on Mr. Whitehouse’s article said it a lot better than I could. Here is a link to those comments.
http://www.bloomberg.com/news/2012-01-30/what-krugman-didn-t-say-about-the-u-k-s-austerity-plan-the-ticker.html#disqus_thread
@GypsyDog, thanks. I wasn’t comparing with Europe alone; even US has its Central bank and the reserve currency held by the world close to 70%; lost its AAA status. UK is also performing austerity (in long term) market imposed or not, and QE/Stimulus in parallel.