It just get better. Reported on the BBC is the UK has the biggest debts in the world of all the big nations.A consultancy firm McKinsey had reported on it. There is a two-part documentary, called The Party’s Over, that will be broadcast on BBC Two at 1900 on 4 and 11 December.

 

According to the consulting firm, by the end of March this year, the aggregate indebtedness of the UK – that’s the sum of household debts, company debts, government debts and bank debts – had risen to 492% of GDP, or almost five times the value of everything we produce in a single year.

That compares with 481% at the end of 2008.

So the UK’s total indebtedness has increased, and is still the biggest relative to GDP of any of the big economies. That said, Japanese indebtedness is pretty much the same size – at the end of 2010, as opposed to the end of March 2011, Mckinsey says Japan’s debts were also 492% of GDP.

US indebtedness is less, at 282% of GDP by the middle of this year, down from 296% in December 2008.

In the case of America, government debt is on a steeply rising trend, jumping from 61% of GDP to 80% over the past two and a half years.

so whats caused all this

When banks stopped lending, and private-sector spending and investing collapsed, governments continued to spend, even though tax revenues were falling. So public-sector borrowing exploded.

…………..

government debt has risen from 52% of GDP, which at the time was pretty low by international standards, to 76% of GDP, which is more or less standard for the rich west.

But as you’ll know, UK government debt remains on a fairly sharply rising path (the government’s deficit is some distance from being closed).

One other slightly surprising and – perhaps – disturbing trend is that the debt of financial institutions has risen, from 205% of GDP to 210% of GDP.

 

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