UK debt ‘as bad as Greece and Portugal’

Simon Johnson, former chief economist for the IMF, says the UK will face problems in the future unless it can convince markets it has its deficit under control.

The Treasury says all major ratings agencies have confirmed the UK's triple A credit status.

Johnson says the Greek situation is particularly bad, but worried the UK could face similar problems with spiralling debt.

"I have to add the UK to this list. Unless you can persuade the markets that you're really going to bring the budget under control within the foreseeable future and you're going to have some credible actions - and you're going to have to do some persuading - you're going to have big trouble," he says.

He also criticised the G7 group of countries, calling the organization ‘fundamentally useless' for its failure to react quickly enough over the financial crisis.

"[The G7] seem to show no awareness at all that much of Europe is facing a serious crisis and it's not limited to Spain, Greece and Portugal, it's also going to include Ireland. I think Italy is also very much in the line of fire. There's a very serious crisis inside the Eurozone."

G7 finance ministers were recently forced to defend Europe over questions from the US, Canada and Japan regarding the debt problems in some Eurozone countries.

Categories: Economics / Markets

Tags: Budget | Debt | Imf