rogoff228_Chris J RatcliffeGetty Images_pound low Chris J Ratcliffe/Getty Images

Britain Is Not an Emerging Market – Yet

In response to British Prime Minister Liz Truss’s “mini-budget,” financial markets have sent the pound spinning to its lowest level ever, with no bottom in sight. While talk of an outright UK default is overblown, it is not unreasonable to anticipate a painful reckoning just short of that outcome.

CAMBRIDGE – Following British Prime Minister Liz Truss’s “mini-budget” – a mishmash of policies ranging from Reaganomics-style tax cuts for corporations and the wealthy to an old-style socialist cap on energy prices – commentators have reacted with increasingly florid hyperbole. Many now wonder whether the United Kingdom is coming to resemble less an advanced economy than a wayward emerging market.