Osborne: We’ll sort debt on never never
Published: 14th March 2012
GEORGE Osborne wants to tackle the UK's debt crisis with never-ending loans last used to rescue Britain after World War One.
The Chancellor plans to raise billions by selling Government bonds lasting 100 years — and some "perpetual" bonds that will NEVER be paid off.
Britain sold the bonds to fund loans after World War One. And it is still paying off a tiny amount each year to cover a debt crisis sparked by manic trading speculation in the 1700s known as the South Sea Bubble.
The plan allows the UK to "fix" interest payments to bond buyers at the current two per cent record-low UK interest rate. A Treasury source said: "The prize is lower debt-interest repayments for decades. It is a chance for our great-grandchildren to pay less than they otherwise could have expected to."
At present, UK bonds last an average of ten years. The longest are 50 years.
Mr Osborne flew with PM David Cameron to Washington yesterday, and later held talks with IMF chief Christine Lagarde. The visit came as hopes for a global recovery were lifted by the US Federal Reserve.
It said financial market strains had "eased", thanks to rising employment and investment. It vowed to keep interest rates low until late 2014.
Meanwhile, debt-hit Greece was UPGRADED by credit rating agency Fitch — which called the country's outlook "stable". The FTSE closed up nearly 65 points to within a whisker of 6000.
And there was growing confidence in Whitehall that growth forecasts won't be cut on Budget Day next week.
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