LONDON (Reuters) - A Bank of England policymaker said Britain must not fall into an illusion about its public debt, which soared after the financial crisis and could pose a threat to the country's economy, despite the lack of apparent concern among investors now.
Richard Sharp, a member of the BoE's Financial Policy Committee, said it was important to recognise that Britain's debt levels of nearly 90 percent of gross domestic product might prove stretched if future shocks occur.
"To my mind, low market interest rates and a persistent excess of global liquidity could be creating an illusion of readily available spare national debt capacity," Sharp said, in comments prepared for a speech to University College London.
"The global financial crisis taught us that fragilities can be more real than apparent and that global spillovers mean that broadly shared systemic fragilities can lead to disastrous contagion and amplification," he said.
Britain's budget forecasters last week said the country's debt was expected to peak at 86.4 percent of GDP this year - about double its level before the global financial crisis - before falling in the coming years.
But they also linked the expected fall in the debt ratio largely to the sale of shares in state-run bank RBS and an accounting switch to get housing association debt off the government's books. At the same time, the Office for Budget Responsibility sharply cut Britain's economic growth forecasts.
Bank of England Governor Mark Carney has previously said that Britain remains dependent on the "kindness of strangers" because of its large balance of payments deficit that is funded by foreign investors.
(Writing by William Schomberg; Editing by Hugh Lawson)