• The purpose of the the Economic Policy Centre (EPC) is to promote high quality research and debate across all areas of economics in a free democratic society.
    The EPC's vision is to close the gap between economic policy and knowledge. Ultimately it brings together economic opinion formers - in academia, business, the media and government - in new and innovative ways.

  • It’s the total size of the debt that makes it expensive . . .

    May 17th, 2011

    Beat this for a sobering bar chart in today’s Wall Street Journal;

    The shocker is that while the UK has a lower interest rate than Euroland and can borrow at lower rates than every other major European country other than Germany, we are only just behind most of the  PIIGS (Portugal, Italy, Ireland Greece and Spain) when measured by the total cost to GDP of interest payments on borrowing at 3.1% while Spain is some way down at 2.2%.

    I still think the story that the UK was facing bankruptcy etc. was way overblown and at times, silly. As I have argued here and here.

    But who wants to spend 3.1% of GDP on interest payments while simultaneously trying to enshrine in law a commitment to Foreign Aid of 0.7%?