Friday, February 20, 2009
The fiscal cost of the banking rescue
Posted by David Smith at 06:00 PM
Category: Thoughts and responses

A few days away without internet access, and what do you find? The Office for National Statistics is about to add between 70% and 100% of GDP to public sector debt because of the government's rescue of RBS and the Lloyds Banking Group. This is the ONS announcement, which should properly be read in conjunction with the regular release on January's public finances, here.

This shows that without the "financial sector interventions" public sector net debt would be a very acceptable 40.4% of GDP, which is the number the Treasury would like us to focus on. Perhaps we should, because we won't see its like again for a very long time.