PITY the poor electorate in May. They are stuck between the rock of austerity and the hard place of extended National Debt interest repayments.
Interest rates are determined by the demand for Government bonds.
In the UK, the economy is undeniably starting to pick up.
More people are in employment, inflation is low, bordering on deflation, and even wage increases are starting to improve.
Given this situation, money markets are satisfied that the UK, unlike some other European countries, is able to repay its debts.
Interest rates on loans are therefore low and there is a strong demand for Government bonds.
The annual interest on the current National Debt is about £48.7 billion equating to about 2.8 per cent of GDP.
The choice voters have to make is do they prefer a relatively short period of austerity under the present regime, or would they prefer an extended repayment of the debt under a Labour regime?
Although I am no lover of austerity, I feel that the quicker we get rid of this debt the better off we will all be. I can think of better uses for the billions of pounds that the National Debt interest incurs annually.
JAMES MARTIN
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