Lets put this another way... I have been saying for a while now that UKPLC is bust. Noo Labs promise of no more boom and bust is going to bite them in the arse.
They have fought unemployment, not by generating a credible, well educated and respected workforce but by creating literally millions of non-job civil servants, allowing the unemployed to be passed off as unfit to work for reasons as rediculous as stress, whilst pouring billions into areas that needed more than funding to secure a healthy and equitable living environment. UKPLC now has the largest real public accounts deficit in its history, M4 money supply growth busting 15%, and falling tax revenues at a time we need to be spending more, in other words, we should have been saving for the past 10 years instead of spending it wantonly on millenium domes, the NHS and olympic stadia.
For me, its sad, because the last ten years were a wasted opportunity.
Back to the thread, it is really hard to see how they are going to resolve this one. Trouble is only starting for the international bond markets, with many of them expected to lose their AAA ratings. Banks will not lend to anyone, including the govt, without a significant punitative rate, and worse, they know they arent going to get in next time so they arent exactly going to go out on a limb to spend cash on something now that will only be in when the conseratives come to power.
Better get our tin hats on, as many many former bullish economists are predicting stagflation that could be worse than the 1970's. Once the public sector start to strike in force, just watch inflation go through the roof, along with pay deals! (and not neccesarily us either!)