Back in January, Bill Gross described the U.K. debt situation as sitting on a pile of nitroglycerine.
The U.K. debt office was quick to retort that they were ‘very comfortable’ sitting on nitroglycerine and that in fact the U.K. would pull through just fine.
They argued that, unlike Greece, they have their own currency, the pound, which can act as a shock absorber by depreciating according to the U.K.’s situation.
Well now, just two months later, Bill Gross has done a 180 and come around to the U.K. debt office’s view:
Pimco managing director Bill Gross, who in January said gilts were “resting on a bed of nitroglycerin”, now believes the UK is “decently positioned” to escape its debt crisis.
While the UK remains on Pimco’s ‘must avoid’ list, he says Britain has some advantages over Greece in the fight to avoid similar debt pressures.
Gross believes by having its own currency and proactive central bank, as well as improved demographics, the UK is in a far stronger position.
“For now though, ‘crisis’ does not describe their current predicament, yet that bed of nitroglycerine must be delicately handled.”
The U.K. isn’t out of the woods, but it’s looking far better to Mr. Gross than before.
Business Insider Emails & Alerts
Site highlights each day to your inbox.