(Updated below) The European Commission is predicting that by 2011 the British National Debt will be 88.2% of the country’s gross national product (GDP).

As an increase of 44% in the percentage of GDP since 2007 (when the UK was at 44.2%) this is the third highest in the European Union, topped only by Latvia in 2nd place with 51.4% and Ireland, in 1st place at 71.1%

Showing that the UK is running the worst structural budget in the EU, the Commission rammed home the point that it is not the recession that has brought the UK so low but the high level of structural government deficit – in effect the state of our so-called ‘reserves’ – going into the recession, that did the damage.

These reserves had progressively been plundered by Gordon Brown as Chancellor, virtually invisibly, as he ran under the flag of ‘prudence’ – now seen as an absolute reversal of the truth.

The European Commission’s analysis comes as it is known that the Bank of England’s Monetary Policy Committee is considering a further printing of money – the laughably euphemistic ‘quantitive easing’, which sounds more like the cure for constipation that, in fact, fiscally, it is.

The Committee is now in the second of a 2-day meeting on a subject which has divided its membership. It has already printed more than £150 billion. It is looking at calls from from the Chief Economist at the British Chambers of Commerce (David Kerr) for a further immediate injection, taking the total to £200 billion, ‘with the option of additional increases later on’.

And a former member of the Monetary Policy Committee has said that the policy will need to go to a total of £250 billion to prevent unemployment rising to a level catastrophically beyond the 3 million mark.

And there’s more.

As the EU forecast shows that a failure of government to react to the situation of the national debt will see that debt rise to over 140% of GDP by 2020, there has been the added irony of the price of gold rising to its highest level ever, with India paying £4.1 billion for 200 tonnes put up for sale by the International Monetary Fund.

We have regularly pointed out that the prudent and percipient Chancellor Brown sold off half of the UK’s gold reserves around the millennium. Selling at the bottom of the market, even then he lost us £2 billion in the deal – and since then the price of gold has risen to its current astronomical height of $1,080.6 per ounce.

The combination of ‘albatross’ and ‘Brown’ somehow comes to mind.

Anyone who trusts the man who got us into this mess, far beyond historical precedent, somehow to get us out of it, is willfully flying in the face of the hard evidence.

This is a self-interested theoretician who bought political support by spending well beyond our means and who is now punch drunk and floundering in the deeps of a fiscal Mariana Trench his ‘regulation with a light touch’ was instrumental in digging.

Update 14.00 5th November: At the close of its 2-day meeting today, the Bank of England’s Monetary Policy Committee announced that it has decided to do as the British Chambers of Commerce’s Chief Economist had asked – and ‘print’ a further £25 billion to inject into the economy. The Committee said that it has already injected £175 billion and that this addition will bring, as predicted, the total of their ‘quantitative easing’ to £200 billion – for now.

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