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dipsydoodle Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-24-11 04:46 AM
Original message
UK borrowing costs fall below Germany's
The UK government's implied cost of borrowing has dropped below Germany's for the first time in 2.5 years.

If the UK was to borrow for 10 years today, it would pay an interest rate of 2.21%. Germany would pay 2.23%.

The move comes after Germany sold fewer bonds than expected at an auction, raising fears the eurozone debt crisis is affecting the German economy.

The bond market moves suggest that some investors consider the UK safer than Germany, the largest economy in Europe.

http://www.bbc.co.uk/news/business-15869094
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T_i_B Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-24-11 06:10 AM
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1. More a reflection of the Eurozone crisis....
...then an endorsement of the way the UK economy is being run IMHO.
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tjwmason Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-24-11 07:42 AM
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2. Definitely
Though the potential for the U.K. to be pulled further into fiscal support for the Euro is high, we are further removed than Germany is by being outside the Eurozone.
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fedsron2us Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-24-11 03:13 PM
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3. One suspects that is only because the Germans are seen as backstopping the Euro
Edited on Thu Nov-24-11 03:38 PM by fedsron2us
The truth is that the UK is probably the most indebted country in Europe outside Ireland when all classes of debt (public, private, company and bank) are added together

http://www.bbc.co.uk/news/business-15820601

People should also understand that the whole point of the BOE Quantative Easing exercise is for it to print money to buy UK Gilts thus artificailly depressing UK interest rates. If the BOE was not in the market to do that then UK interest rates would be at Irish and Greek levels.Sadly for most Eurozone countries their Central Bank the ECB is not playing that game yet.

BTW I am getting the distinct impression that the Anglo-Saxon banking world is getting a tad desperate for the Germans to agree to the monetisation of Eurozone debt by the ECB so that they can collect on all their speculative positions. To find out what happens if the bets all go down look no further than the MF Global debacle

http://finance.fortune.cnn.com/2011/11/21/mf-global-ban...
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