Confidence in UK Government Securities On Brown's Watch

The cost of insuring against the British Government defaulting on its gilts in the next five years surged to 100 basis points above libor at one stage yesterday...The soaring cost comes as the Treasury unveiled record amounts of spending in the pre-Budget report, with plans to issue an unprecedented £146.4bn of gilts in this fiscal year. (reports the Telegraph).

A spokesman for the Debt Management Office said £77bn has been raised through gilt sales so far this financial year and these government assets "generally remain the preferred risk-free asset for major international investors and are in strong demand internationally and in the UK".... "We think investors in UK Government securities will be assured by the fact that the UK Government has never defaulted on a payment since the origins of the national debt in 1694."

So after only a year as Prime Minister (though admittedly the previous ten years busy wrecking the United Kingdom economy and the Treasury) Gordon Brown has undone over four centuries of trust and confidence and forced the need for statements like this one. The shame.