Britain’s fiscal position took a dramatic hit today as it was revealed that the country borrowed a staggering 4.3 billion pounds ($6.7 billion) in January alone.At this pace the UK’s deficit this year will be higher than troubled PIIGS nation Greece, according to the Times of London.
This early year budget deficit was completely unexpected and, in fact, was predicted to be a billion pound ($4.36 billion) surplus.
This has hit UK gilts, or government bonds, particularly hard as their spread has now widened to 100 bps against 10 year German bunds, according to FT Alphaville.
The UK is now set to run a 2010 budget deficit of 12.8% of GDP, which is .1% higher than the one Greece ran last year, according to Jonathan Loynes of Capital Economics.
This comes just 24 hours after another economist called on the country to bring in the IMF to deal with their debt crisis.