New York, New York (PressExposure) March 09, 2010 -- Asia-based boutique brokerage, "Mann International", has apparently used its latest client email to explain why there is no easy and painless solution to the debt woes of the United Kingdom.
Analysts at the firm say that Britain will soon surpass Greece's budget deficit figure of 12.7% of GDP unless the government takes the tough decisions to drastically reduce public spending and raise taxes.
"Mann International" says that the measures will, without doubt, cause a great deal of hardship for the population whom, thus far, have endured no more than mild discomfort from the economic slowdown. Interest rates have been slashed to near zero leaving those with tracker mortgages paying significantly less to keep their homes. Homeowners have more disposable income but have been using this to pay down debt rather than spending on goods and services.
"Mann International" also point out that austerity measures similar to those introduced in Greece will have to be implemented in Britain sooner rather than later but with the ruling Labour Party campaigning for re-election this summer, it is unlikely that any measures will be introduced before polling day for fear of damaging their chances of being returned to office.
The pound has been the victim of concerted selling on the FX market and "Mann International" believes the government and the supposedly independent Bank of England are pursuing a policy of benign neglect toward the currency in an effort to make Britain's exports cheaper to foreign buyers.