Tag Archives: default

Caron Lindsay

Of course sterlingisation and debt default would lead to Scots paying more for loans, mortgages and credit

By Caron Lindsay | Mon 1st September 2014 - 8:39 pm

Scottish Liberal Democrat leader Willie Rennie has been taking a bit of a pasting on social media from nationalists who don’t like what he said in a tv interview yesterday. He argued what I thought was a pretty obvious point that in a Scotland where we were using the pound without the protection of a lender of last resort and where Alex Salmond had led us to inglorious default on our share of the UK debt, our mortgages, car loans and credit cards would be more expensive than they are now.

There are several reasons for this. First of all, if we have no lender of last resort, the banks have to keep more money in their reserves which mens they have less to lend out. That will push up their interest rates to start with. We would all end up paying more. Think about the effects that would have on already stressed household budgets. We’ve so far avoided the huge spike in repossessions that we saw in the 1990s recession. That could change rapidly.

Remember when Vince Cable was complaining that viable businesses were really struggling because banks wouldn’t lend to them in the wake of the last recession? We’d have that to deal with as well.

Continue reading »
Posted in News | Also tagged , and | 17 Comments
Advert

Recent Comments

  • Jeff
    Peter Martin 4th Sep '26 - 2:11pm: I asked Google’s AI, which is an impartial source if nothing else: I find Gemini’s strong left-liberal ...
  • Matt Wardman
    @Simon We are debating Smart Glasses that make POV videos etc, not normal specs....
  • Tristan Ward
    I hear London Lib Dem’s are running action days tomorrow Saturday and Sunday in Holborn and St I’m sure anyone who wants to join them can find a way of...
  • Steve Trevethan
    Might we have a detailed definition of government borrowing? For example, to whom is it owed, by when, and under wuch terms and conditions?...
  • David Raw
    Thanks for the kind words, Katharine. Beveridge was a civil servant up until 1919 when (through the influence of Sidney and Beatrice Webb) he became Director...