First-time Budget minister faces tough choices as UK debt reaches new peaks
British government spending hits record-high levels while tax burden reaches its peak in seven decades. New Budget minister prepares to tackle massive state debt thats equal to entire UK yearly output
The upcoming mid-week Budget by Rachel Reeves brings attention to UKʼs money troubles‚ with tax changes that might affect both home-owners and business-people
The British governments size has grown too large - spending reached 44.7pc of GDP last year (way above the usual 40pc mark). Tax income sits at 36.9pc: its highest point in 70 years‚ and its gonna climb even more
Looking back at history shows interesting patterns: gilt-selling went from £10-20bn yearly in late 90s to £50-60bn when Gordon Brown was running things. Then came the big crash of 08-09 which pushed numbers to £228bn; things got better until Covid hit
- Lockdown costs reached 57pc of GDP
- Government borrowed £486bn in one year
- Post-lockdown borrowing hit £195bn
- Current forecast shows £278bn needed next year
The money-situation looks rough - UKʼs debt equals its whole years economic output (thats 100pc of GDP). Interest payments cost £89bn yearly: more than what we spend on schools. Plus theres hidden costs like £151bn for private finance deals and lots of money for public-worker pensions
Other well-run countries like Germany spend more (49pc of GDP) but keep debt low at 64pc. The real fix needs better growth - not just 0.5-1pc but 2-3pc yearly. If Reeves doesnt handle this right; markets might lose trust and push up borrowing costs
