While it’s technically accurate, printing more money would undermine our fiscal credibility and significantly increase inflation. Do we really want to end up like Argentina?
We’ve faced similar situations in the past. In 1975, Labour Chancellor Denis Healey sought assistance from the IMF. Could Reeves find herself in a similar position? I consulted three economists, and Ben Ramanauskas from Policy Exchange cautioned that without controlling spending, we could face a “full-blown financial crisis.” So, how concerned should we be? The UK’s public finances are in a precarious condition and are likely to deteriorate further. The national debt is projected to exceed 270% of GDP within the next 50 years, and without improvements in productivity, it could soar past 640%.
Our unstable public finances could also lead to higher borrowing costs, which would further increase the national debt. This would make borrowing more expensive for individuals and businesses, threatening homes and livelihoods. Investors in the bond market might even doubt the UK’s ability to repay its debts, especially if another crisis occurs, such as a recession, pandemic, or war.
The government must act swiftly. Public spending will need to be significantly reduced, particularly in terms of unemployment benefits. This also means eliminating the state pension triple lock, which has become unsustainable.
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Credit to : Uk Political Insider