The head of the U.K. Debt Management Office Robert Stheeman sees little risk of a new financial crisis in England.
He particularly sees the weakening pound as a shock absorber for the British economy, one that Europe’s PIIGS don’t have due to being part of the Eurozone.
Furthermore, there’s now also massive political momentum in the U.K. to get deficits under control, unlike certain European nations.
Thus he’s literally laughing in the face of crisis predictions.
Bill Gross from the US bond fund Pimco said last month that gilts were sitting on a “bed of nitroglycerin”, warning that UK debt levels posed a serious devaluation risk.
Mr Stheeman joked that he was “very comfortable” sitting on nitroglycerine. The markets have coped well so far with the Bank of England’s pause in bond purchases, or quantitative easing, and were anticipating the return to normality in a “smooth way”. The agency is counting on British banks to step in as major buyers under new regulations.
Today’s report of slightly higher than expected U.K. GDP growth (0.3% vs. 0.1% expected) at least slightly supports his case.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.