Our credit rating - a second view

Earlier in the year Standard and Poors, an index which gives a rating to governments and companies who may invest overseas, left us with a triple star rating, but commented that any further deterioration and we could lose it.

Now Fitch, another rating agency, has made almost the same point. Record levels of government debt could lead them to downgrade us. In between the IMF has made similar comments. Fitch has described the UK as the most likely sick case in the developed world.

So we have been warned twice that we cannot afford to accumulate more government debt, and our rating could drop because of the increased risk of serious economic failure. If the rating is reduced, interest rates will have to rise as compensation, and servicing the debt will make government finances more difficult and expensive. It would also hinder the the recovery from recession, as higher interest rates make borrowing more difficult.

Fitch suggested that the next government upon taking up office will have to deal with this crucial issue.

Here then, G.Brown, the saviour of the world economy, is at odds with experts whose very existence requires them to be impartial and honest. Brown still thinks a Mad Keynesian Spree is required. He is at least consistent with his belief that we were best placed in the world to come out of recession!

Those, including George Osborne, who saw that the problem was not a mere banking crisis, but rather a credit and debt crisis, may be relieved to hear support for their views. They however, whether sooner or later, will have to deal with the massive over-indulgence in debt.