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The UK government claims Britain is a safe haven”. On the surface, that looks true. Ten-year sovereign yields dipped below 2pc during the last week of 2011. As Chancellor George Osborne often points out, UK state borrowing costs are now similar to those of Germany. In fact, they are at their lowest since the late 19th century. For the Tory high command, benign market interest rates are the ultimate justification for their “austerity” programme. The coalition has apparently convinced global investors its commitment to fiscal probity is deadly serious.

Labour’s economics team and their media cheerleaders conversely claim, ad nauseum, that the government has cut public spending “too far and too fast”. The Tories retort that Labour’s old-fashioned Keynesian alternative – to borrow and spend much more – would be disastrous. If Shadow Chancellor Ed Balls got his way, and the government let public spending rip, the UK would instantly lose its triple-AAA credit-rating and the country would have trouble rolling over its huge debts. A creditors’ strike would ensue, resulting in unpaid state wages, a plunging currency, spiking inflation and serious social unrest. On that score, the government is correct.
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