Simon English: Britain – best of a bad bunch for lenders?

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The Independent Online

Outlook "Investors pay to lend money to the UK," said the headline.

That's sort of true, kind of. The Government has just managed to sell £700m of bonds that are paying below the level of inflation – money for nuffink, chicks for free. In the great scheme of things £700m isn't that much, but still.

Supporters of George Osborne would say that this is a vindication of the Chancellor's strategy to embrace austerity, making Britain a relatively safe haven amid the chaos in the eurozone.

There might be something in this; or at least, we can't be sure that there isn't. The thing is, we don't know what the situation would be if he'd chosen more pump priming of the economy over cutbacks.

But another way of looking at it is simply that the markets think the Bank of England isn't going to raise interest rates for many years. And the reason investors think that is because Mr Osborne has killed the possibility of economic growth. So they aren't saying that lending money to Britain is a great deal. Just that there are worse ones out there. Rejoice.