Are you depressed about the UK economy?

Read Allister Heath in The Spectator and you will be. Here's a few brief excerpts:

"A few months ago, Alistair Darling was asked how long he thought his government could continue to borrow £600 million a day. Might creditors one day refuse? The Chancellor gave an oblique reply. ‘When you walk over ice, you never know it is too thin — until you fall through.’ He said no more, but his message came across. If the bottom falls out of the British economy, it will do so instantly and dramatically. There will be no warning.

...

The markets are already growing jittery at the prospect. Gilt yields have risen sharply: the UK government now has to pay close to 1 per cent more in interest than the German government for a ten-year loan. Such rises will ricochet down the economy, passed on to companies and homeowners. Not only do we need to pay more than the Americans and French — but our debt is now deemed to be a riskier prospect than even Italy’s, an astonishing about-turn and humiliation. British government IOU notes have long been costlier to insure than those issued by McDonald’s.

...

Saxo Bank believes that we have witnessed ‘what can justifiably be called the beginnings of sterling’s collapse’ — and one caused by the prospect of a political power vacuum. It sees the pound tumbling to $1.20 by the summer — it was $2 two years ago and fell to $1.50 this week. Even if one is not that pessimistic, it is clear that the only way forward for sterling — or the GB Peso, as its detractors call it — is down.

While it is hard, almost impossible, to predict how close Britain is to the edge of the financial vortex, we know — by looking at the countries that have already slid in — what happens when things go too far. Expectations of collapse drive reality. A serious sterling slide would trigger widespread panic and further spook the debt markets. Why would foreigners continue to buy UK gilts if the value of sterling keeps on falling? They would be watching the value of their investment plunge. So they will demand even higher interest rates to compensate them for the risk — which, in turn, will frighten the markets, and burden British taxpayers even more. "

OK, now are you depressed? I am and I don't understand people who say "don't worry, we'll muddle through".