The UK is going through a sovereign debt crisis

Though as yet undeclared and unacknowledged by ministers or the Bank of England, the United Kingdom is going through a sovereign debt crisis of the kind experienced by the likes of Greece, Portugal and Italy around a decade ago. The chancellor, Kwasi Kwarteng, unveiled the Conservative government’s latest answer to the modern British disease of low growth and high indebtedness – and investors worldwide found it worse than unconvincing. First, Mr Kwarteng should appear at an emergency session of the Commons – tomorrow would not be too soon – and announce his broad policy to fund his tax cuts and bring borrowing under control. To keep up to speed with all the latest opinions and comment sign up to our free weekly Voices Dispatches newsletter by clicking here Second, and in the context of the new mini-Budget, the Bank of England needs to hold an emergency meeting of the Monetary Policy Committee and ramp interest rates by an amount sufficient to persuade markets that it means business on inflation. If Ms Truss doesn’t act decisively now to “deliver” financial stability, then she will be soon overwhelmed by events and forced to ask for a stand-by facility from the IMF – a humiliating bailout that will damage her party for years to come, and push the cost of borrowing for the UK permanently higher.