The UK’s austerity strategy may be failing, with datapoint after datapoint sinking, but it doesn’t go nearly far enough, according to Jim Rogers.
Speaking to CNBC, Rogers says, “How can the UK ever repay the debt that is continually rising? The UK will need a bailout soon. You have the advantage that your debt is longer term but let’s assume the government keep to these austerity plans or really put them in place people will start to complain.”
Rogers then explained that, if the people do start to complain about the impact of austerity, they are likely to vote against the coalition in elections, and kick them out of power.
The UK did take an IMF bailout before, in 1976, under then Labour Chancellor Dennis Healey. The UK received a £2.3 billion loan at that time. It needed support due to high inflation and unemployment, two characteristics of a stagflationary environment.