Europe's banks brace for UK debt crisis

Tagged along with other threads which make mention of the coming UK budget, it seems out european counterparts are worrying about where the UK is going.

UniCredit has alerted investors in a client note that Britain is at serious risk of a bond market and sterling debacle and faces even more intractable budget woes than Greece.

I am sure all will be ok though as Gordon Brown said:

We saved the world

However, being serious:

"I am becoming convinced that Great Britain is the next country that is going to be pummelled by investors," said Kornelius Purps, Unicredit 's fixed income director and a leading analyst in Germany.

Mr Purps said the UK had been cushioned at first by low debt levels but the pace of deterioration has been so extreme that the country can no longer count on market tolerance.
"Britain's AAA-rating is highly at risk. The budget deficit is huge at 13pc of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that," he told The Daily Telegraph.

Whoever gets in next to be our elected government is not going to have a fun time....

Source

If the Conservatives come into power in the UK or even if Labour stay which is unlikely.. The cuts will be colossal!! And the Brits like an old riot now and again so the strikes should turn nasty every so often

What the UK has going for it in Europe is that it controls its own currency and it is a very versatile economy. They can easily cut back on spending.

Ye just have to get the election over and done with.

Ireland was in a much worse condition last year and it stabilized almost completely overnight once the budget's had been decided.


[edit on 12/3/10 by Dermo]

from whast i read you brits are likely to end up with a coalition government which i guess is a bad thing right? and at such a pivitol time too... its going to be very interesting.. i think the UK is alot like the US right now, totally ignoring the numbers.... its no surprise that london and new york city are the top two finanncial centers in the world...

From where the Tories are saying nothing, here's where they could and probably would slash costs:-

- The Argentines Threat - Urgent redeployment of the military from Iraq and Afghanistan to the Falklands. With Biden saying "Israel is our closest friend", the State Department saying, "You [the UK] are just another country" and Obama being persistently nasty to the British, this would be a"slamdunk to sell".  Military in the Falklands would be a fraction of the cost than maintaining the military under fire of bullets and bombs.
- Goodbye ID Card
- Big cuts in Local Authority grants. With these gone, maybe they might not be able to afford all these jerks watching everyone on CCTV.
- A few Universities "merged" away
- Mass redundancies in the civil service
- "Reform of the House of Lords" dumping hundreds of Labour flunkies out on their ear.
- Dollar exchange reserves dumped on the market and something else bought that won't devalue.
- RUbbish stimulus stuff like sports centres closed, sold off, cancelled.
- Swingeing cuts at MI5 and MI6 - expect all sorts of leaks as disgruntled employees hit join the dole queues.
- Funding for the Arts and Sports? - Whoa-ha-ha-ha!
- Nationalised banks like Northern Rock and HBOS either dumped back on the market of sold off to anyone who wants a share.
- Of any banks fail in future, they'll probably intervene to help the depositors with the first, say, 100,000 pounds and that's it.
- Big cuts in foreign aid, particularly to countries like India and China.

I think the March 24 declaration will be key to all of this and discussed thoroughly in other threads.

It seems that the EU are prepping for what could be a none-to-good reaction? Or by announcing things like this prior to the 24th it places pressures on people and what they 'want' to say...

Time will tell.

The 24th is a tipping point, I am sure of that..

Sarkozy meeting both Brown and Cameron todays sums it all up really for me, especially with the close lipped partial endorcement of Brown by Sarkozy.. At least cameron knows he need to play the big guns once the election campaign starts.

I wonder how the Republicans will take a Tory election campaign that runs along the lines of bailout "bad", money printing "bad" Jobless losses "bad"

That's not going undermine the US/UK relations at all *sarcasm* nor will it hand the Replublicans another hammer to hit Obama with..

And going by the last few PMQs it's going to be a nasty, back stabbing underhanded and down right dirty election campaign.. which I sure the markets will love *not*

I vote this will be a tipping point for the start of a very interesting ride ahead

I predict there will be defence cuts, they will stupidly scrap our nuclear capability, and reduce the size of the armed forces.

They will try and privatize the NHS, and introduce an insurance scheme. They are already doing things in this direction with care for the elderly. Dentistry was pretty much privatized years ago, with the final nails starting with the NHS dentistry contract introduced a year or two ago that was to try and put dentists off from doing NHS work, thus forcing people to pay privately.

After that - who knows? We need to get the hell out of Europe. Unfortunately if the Cons get in, this won't happen (they're unquestionably pro-Europe). Whether they will try and persuade, or simply force us, to join the Euro remains to be seen.

We need an overhaul of our political system. Let's start by scrapping the party system - what a load of junk!

The country maybe doomed to lose the AAA once the election is over regardless of who wins.

If the Tories win then the REAL figures will come out, all the off balance debt that is not on record, all the scams and administrative and accounting tricks use by Labour to make things look better to the markets will be revealed.

If Labour win then well it's train derailed and fallen over a cliff time pretty much straight away.

Lib Dems are a liability if they come into a coalition, Labour will palm them off instead of listening to them and they will hamstring the Tories from making many of the needed cuts.

It's not 1979, this is a whole different ball game that will be alot harder to come back from.

The only solution for UK to get out of this financial storm is to do what the majority of the European country did years ago, is to change their currency and adopt the Euro. I feel a conspiracy orchestrated by TPTB against UK.

reply to post by mirageofdeceit


There won't be any major defence cuts at all, not sure where you're getting that info from. They can't scrap most of the new procurements, like the carriers, as the penalties of bailing out are more then the carriers themselves. Besides, the public won't support any defence cuts and anyone who tries will be facing a major backlash. Not something a minority or slim-majority Government needs.

Same with the NHS. There will be cuts, but on the billions wasted by Labour on the reams of "managers" and other pen-pushers who are there to hit "targets" rather than cure people.

Same with the Civil Service, which has doubled in size since Labour came to power.The Tories will slash and burn there.

Euro, under Cameron? Not bloody likely. This guy is as anti-EU as they come without going UKIP and if you think otherwise you don't know anything about the man.

Oh, the "party system" as you put it, isn't even recognised by Parliament. Nor are whips and all the other baggage that goes with it. It exists because we allow it to exist.

Chances are the Tories are going to get in and they'll do what they do everytime they inherit a huge pile of crap from Labour (anyone remember the 70's?). We actually had a huge budget surplus by the time Blair won in 1997, which he and Brown frittered away making sure they created a class of useless, uneducated breeders that they supported with tax money in order to garnish their votes...

If it ends up a hung Parliament, there will likely be another election within a year. Our system doesn't do coalition Governments, thats for the weaklings on the continent..

reply to post by St-Patrick


What? The EURO isn't the answer and in fact, it would most likely hamper our economic growth.

Originally posted by St-Patrick
The only solution for UK to get out of this financial storm is to do what the majority of the European country did years ago, is to change their currency and adopt the Euro. I feel a conspiracy orchestrated by TPTB against UK.

They can't afford to take the UK on anyway, I think if I recall correctly the UK long passed parity with it and the Euro has been revealed as paper tiger currency with it's spectacular free falls.

A elaborately built up sham that crushes the countries that have adopted it to take even harsher methods than the UK will have to in the long run.

I am telling you that before 2017 your currency will be the Euro.

It is written in the sky.