The Anglo-Saxon world is feeling smug this weekend. UK and US policymakers are counting their blessings they’re not directly embroiled in the historic debacle that is the single currency. This euro-crisis is obviously very seriously undermining global investor sentiment. The negative impact on growth, both in Britain and the States, is clear. It is axiomatic that the financial chaos stemming from a fully-blown, market-induced “euroquake” would cause deep aftershocks everywhere, not least across the rest of the Western world.
There is palpable relief, though, in London and Washington, that attention is now squarely on the eurozone’s woes. That makes life easier for the deeply-indebted Anglo-Saxon governments – which is particularly welcome for Chancellor George Osborne, given that he’s about to give his Autumn Statement. Osborne’s speech writers will, no doubt, make much of the fact that UK government bond yields last week went below those of their German counterparts. That happened, though, not because the coalition’s debt-reduction plan became more credible. On the contrary, the upending of the UK’s growth assumptions has made it even less likely that Britain’s fiscal numbers will add up.