PARIS, July 21 (UPI) -- The contradictions in Europe's economies are becoming stark. In Britain, the government has resorted to its highest level of borrowing since the public finance records first began in 1946. It borrowed $49 billion in the last three months, an annual rate of $200 billion, which is close to 10 percent of GDP.

In June the prices British manufacturers paid for their raw materials and fuel jumped by 30 percent from the previous year. Motoring costs are up 24 percent and food prices up 10 percent.

And yet foreign investment into London reached a record high this year, despite the financial crisis. A record 178 international companies set up or expanded business in the capital in the year to March, pumping $1.5 billion into the city's economy and creating more than 6,000 new jobs. Most of the investment, about 30 percent, came from the United States, 9 percent each from India and China, 8 percent from Australia, 7 percent from France and 6 percent from Japan.

In short, the British economy is in trouble, with growth stalled, inflation letting rip, house prices dropping, unemployment rising and the government's finances getting deep into debt. But foreign investors are fighting to get in.

Then take Europe, where the new head of the European Bank for Reconstruction and Development is warning that the long boom in Eastern and Central Europe is being punctured by inflation, "which is double-digit or which is even above 20 percent." Thomas Mirow, the bank's new president, said inflation at this level "has the potential to destroy part of the progress that has been made in many of these societies."