UK 'is going the way of Iceland'

Asgeir Jonsson, head of research and chief economist at Kaupthing Bank, said: "I do think the UK runs a similar, though reduced, risk like Iceland. With a banking sector 4.5 times GDP, small foreign reserves and no reserve currency, there must be lessons for the British to learn.

"There remains a small, though niggling, problem of the sheer amount of debt the UK Government has to sell. What if it can't be sold?"