The cost of the financial crisis could add an astronomical £1.5 trillion to Britain's national debt, bringing the total to £2.3 trillion - equal to the country's entire GDP for one year, the Office for National Statistics (ONS) has said.
The surge has been fuelled by huge liabilities dumped on the public balance sheet by the Royal Bank of Scotland (RBS) and Lloyds Banking Group's.
But the figure - at the top end of initial ONS estimates - is based on an assumption that all risky loans will go bad, so that the Treasury can prepare for such a worst-case scenario.
Also, under the asset protection scheme which insures loans that turn sour, banks are liable for the first £60 billion before the taxpayer becomes responsible for losses.
Nonetheless, the figure of £2.3tr is colossal and was announced just as RBS, which has risky loans totalling £282bn, revealed it had already eaten into £30bn of the money it is liable for - increasing the likelihood that the taxpayer will have to pay off the remaining £222bn.
This gloomy picture was made worse by RBS unveiling a pre-tax loss of £2.1bn in the July to September period and the announcement that 3,700 front-office jobs are lined up to be axed.
This was on top of the 4,500 back-office cuts announced in April.
Following these developments, RBS chief executive Stephen Hester said the bank was "more than halfway through" its major restructuring programme.
If you have enjoyed this article then please consider donating to the Morning Star's Fighting Fund to ensure we can keep publishing your paper.
Party political manoeuvring between the Greek social-democratic, conservative and fascist parties has delayed acceptance of the blackmail demands presented by the troika of European Union, International Monetary Fund and the European Central Bank.
The growing intervention in Syrian internal affairs demonstrates the West's blatant attempt to rally reactionary Arab forces in support of its continued domination of the region, says George Galloway
Jacqui Smith's bizarre call to get schmoozing with the City
Printable
Email