British Prime Minister sacked the Chancellor of the Exchequer (head of Treasury) Kwasi Kwarteng on Friday, and economic commentary was predictable. Variations of “markets force government to backtrack!” were abundant, and echoed by Labour Party supporters (which would be surprising for anyone unfamiliar with British politics).
Involuntary default is impossible as all UK bonds are denominated in Sterling. Voluntary default would require rewriting primary legislation.
HM Treasury is required to repay borrowing under s12(4) of the National Loans Act 1968 which gives it a standing charge over the Consolidated Fund without further spending approval from Parliament.
Involuntary default is impossible as all UK bonds are denominated in Sterling. Voluntary default would require rewriting primary legislation.
HM Treasury is required to repay borrowing under s12(4) of the National Loans Act 1968 which gives it a standing charge over the Consolidated Fund without further spending approval from Parliament.