LONDON, Nov 10 - If a re-emerging risk premium in bonds is down to government debt sustainability worries, central banks may need to lobby their Treasuries that it's undermining their control of credit.
Britain's brief budget and debt shock late last year and the way the Bank of England was forced to react was perhaps a taster. Unless long-term rates sink back again or primary budget deficits that exclude servicing costs are returned to zero, he reckoned rising debt piles as a share of gross domestic product was"inevitable", putting them at risk of"exploding".
"It is not good, but it is not catastrophic," he wrote, but added that simply doing nothing did risk the feared explosion.Based on the Congressional Budget Office's June projections and assumptions - before the latest bond yield spike - U.S. debt-to-GDP was forecast to almost double to 180% by 2053.
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