The International Monetary Fund, which has just been given another £500bn by the G20 nations, announced yesterday that the cost of the banking bail-out to the UK would be a staggering £200bn.
This wasn’t quite what Alistair Darling and the Treasury wonks wanted to hear in advance of today’s Budget so they complained. The IMF then apologised and revised its figure to about £90bn. Darling himself says it’s £60bn, roughly speaking the amount of government cash that’s already gone into Royal Bank of Scotland, Lloyds Banking Group, Bradford & Bingley and Northern Rock.
And there’s the rub.
Darling says that the money so far invested in the banks is enough and that private capital can supply any more that’s needed. The man at the IMF with the excitable calculator thinks billions more will be needed.
Darling is probably right and on top of this there’s the likelihood that RBS, Lloyds and Northern Rock will be sold back to the private sector at some point in the future for a profit. The 43 per cent of Lloyds that the Government owns probably could be now.
So calm down dears, the worst will probably never happen.