Britain's quiet default

Puerto Rico's debt default will be very public, says Merryn Somerset Webb. Expect Britain's to be more subtle.

Sometimes Donald Trump has value he says the things other politicians would like to say, but haven't quite got the nerve to do so. So it was this week with Puerto Rican debt. The island "owes a lot to Wall Street", he told a US reporter. "We're going to have to wipe that out You can say goodbye to that."

The debt can't be paid back by Puerto Rico, and the central government isn't stepping in to cover the shortfall ("we are not going to bail out those bond holders", said Trump's budget chief). So it won't be paid back. There was pushback from Wall Street ("it's just noise", said one analyst), but the bond market took Trump at his word. Try to sell a general obligation Puerto Rican bond with a face value of a dollar this week, and you'll be lucky to get 33 cents for it (down from 56 in September).

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.