Slice through the red tape and get Britain booming

A REMARKABLE financial event occurred last month, though the intensity of the media spotlight on coronavirus meant it was not all that much remarked upon.

- Patrick O’Flynn Political commentator

What happened was this: for the first time anybody can remember, private investors paid the British state for the privilege of lending it money. In the technical terminology, bond yields dropped below zero. In layman’s terms, investors were so keen to find a safe haven for their cash that they started paying the Treasury to take it away and put it to use.

They did this despite knowing that the UK public sector deficit will come in at a record high this financial year, probably comfortably exceeding £300billion due to the huge spending keeping the economy on life support during the Covid pandemic has entailed.

So financial markets do not think there is a risk of the UK public realm going bust, leading to a Greece-style default.

In fact, they are more concerned at the risk of large private businesses going bust, leaving shareholders and employees high and dry. So should be the rest of us.

Given that when Boris Johnson first became Prime Minister and at December’s election one of his central insights was that a wave of new public infrastructure investment could raise living standards and boost the private sector’s ability to create wealth in many neglected regions, this means a major question is looming.