10 July 2026
Earlier this week, our NFA World Cup ranked Norway as the tournament’s strongest sovereign balance sheet. On Saturday, that prediction meets England on the pitch.
The fixture carries a deeper economic contrast. Britain and Norway discovered oil beneath the same sea and emerged with radically different national balance sheets.
“Maggie Thatcher, can you hear me? Your boys took a hell of a beating!”
Bjørge Lillelien’s commentary followed Norway’s 2-1 victory over England in 1981. England may again start as favourite. In the longer contest over North Sea wealth, however, Lillelien’s verdict has proved durable.
In 1965, Britain and Norway divided their continental shelves broadly along the median line. The settlement was legally rational but geologically arbitrary. Neither country created the oil beneath it. What mattered was what each did with the proceeds.
Britain treated North Sea taxation largely as ordinary revenue. It supported spending and reduced borrowing through recession and industrial restructuring. The money was not simply wasted. But it passed through the annual budget without creating an equivalent stock of public assets. A finite resource funded current consumption.
Norway chose differently. It captured petroleum income through taxation, state ownership and direct participation, then separated much of it from routine spending. Its petroleum fund, established in 1990, became the Government Pension Fund Global. By the end of 2025, it was worth more than NOK21tn, mostly generated by investment returns rather than state contributions.
That is why Norway topped our NFA rankings.
Net foreign assets measure what a country owns overseas less what foreigners own domestically. Norway has one of the world’s largest positive positions. Britain remains a net debtor.
For bond investors, the distinction matters. Norway issues government bonds as a state whose financial assets vastly exceed its liabilities. Britain must repeatedly ask investors to finance deficits and refinance maturing debt. When yields rise, more tax revenue goes to interest rather than infrastructure, healthcare or education.
Britain spent much of its North Sea inheritance and now pays the bond market to finance its future. Norway invested its inheritance and earns income from the rest of the world.
That contrast was easier to ignore when interest rates were near zero. Higher yields have restored the importance of national balance sheets. Norway’s wealth also acts as a shock absorber when growth weakens. Britain has less room to respond without borrowing more, raising taxes or cutting spending.
Britain could not simply have copied Norway. Its smaller population and larger reserves made the task easier. Nor would saving every pound have made sense.
The deeper failure was that Britain never treated depletion of the North Sea as the sale of a national asset. Oil receipts entered the Treasury like any other tax, without recognising the loss of natural wealth on the other side of the balance sheet.
The lesson extends beyond oil. Privatisations and other one-off receipts may flatter the public finances, but selling an asset only makes a country richer if the proceeds build another asset or repay a liability.
The NFA World Cup is a playful way to make a serious point. External wealth does not decide football matches, nor does it replace analysis of growth, inflation or valuation. It does show which sovereigns have resources to fall back on and which remain dependent on creditors.
England may win on Saturday. But whatever happens on the pitch, the longer contest is settled. Norway turned oil into assets, income and fiscal resilience. Britain used much of its windfall to finance the present and now relies on bondholders to finance the future.
On the stewardship of the North Sea, England’s boys have already taken one hell of a beating.