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Cameron warns of potential for UK to default on debt

Conservative leader David Cameron has warned that the UK could default on its debt.

Speaking at the Royal Society of Arts yesterday, Cameron said the increased Government debt runs the risk of higher interest rates and of the Government not being able to meet their obligations.

But immediately after saying this, Cameron said he was not actually predicting this would happen, just that as Government borrowing goes up, there is a risk that it could happen.

Labour has hit back at the comments branding them “political naivety”.

Treasury select committee chairman John McFall said: “This is economic policy by innuendo. It serves no one, not least the Government and not himslef as an aspirant to Government, to frame the economic debate in such loose language.”

Cameron said: “I have never predicted that is going to happen. But as Government borrowing goes up and up an up, you start running that risk. You should not be running that risk…I’m not saying it’s going to happen, but the Government, with the levels of indebtedness they have, they are running those risks.”

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