UK government debt took a whack yesterday, the gilt market dropped heavily on what the FT describes as ‘fiscal fiction’. The FT is blunt:

Investors took fright on Thursday at the timidity of the government’s plans to balance the books with one of the biggest sell-offs of British gilts this year.

The fiction will continue, the Bank of England will print more money and buy take billions more gilts on to its books to prop up the market.  The Moodys bond rating agency warned that the ‘AAA’ rating on UK sovereign debt was good for now, but within a few years that could be history.  The day of reckoning will be postponed, only to be worse when it comes…