Debt comes back to bite Britain

The danger of debt has become all too real to Britain. Now it is dragging the country down even while the rest of Europe appears to be improving. According to the International Herald Tribune,

The British economy remained mired in recession during the third quarter, according to data released Friday. That stood in stark contrast to the countries using the euro, where reports showed steadily improving activity.A significant reason for the divergent performance appears to be the larger debt burden of British consumers, analysts said.

The UK economy has contracted for a full year and a half, making this downturn the longest in 54 years. Jean-Michel Six, chief European economist at Standard & Poor’s, says debt is the main factor undermining a recovery in Britain.

“UK consumers are coming out of a period of very significant leveraging, and the process of unwinding that is long and painful,” he said (emphasis mine).

Strangely, even when Britain is drowning in debt, the UK government has somehow rationalized one of its largest spending sprees in history in an effort to “stimulate” the economy.

As the Trumpet has said repeatedly: A problem caused by unsustainable spending and debt cannot be solved by even more unsustainable spending.

Expect a sharp deterioration in the UK economy over the coming months and years.