How long before the UK approaches the “event horizon” of bankruptcy and default? 3 trillion pounds of national debt imminent, 4 trillion by 2033, 5 trillion by 2040
PETER HALLIGAN
The MSM is finally, recognising the dire straits facing the UK, though do not yet recognise the urgency !!!
From here:
Economy under strain as Labour’s ‘unparalleled’ borrowing to send national debt past £3trillion
As I have posted repeatedly, the only way to reduce the debt pile is to run fiscal surpluses – for decades!
The UK needs a 2-3 per cent of GDP fiscal SURPLUS , from this years 5-7 per cent of fisca DEFICIT as a minimum – THIS YEAR!
Here’s a few extracts.
“The Chancellor plans to borrow in excess of £430billion during the next five years to address shortfalls in public finances.”
See the cognitive dissonance?!? Borrow 430 billion to address shortfalls??
“The country’s outstanding borrowings currently sit at £2.93trillion, a dramatic escalation from the £350billion recorded at the start of the millennium.”
A tenfold increase in the last 25 years!
“The Treasury has allocated £135 billion for debt interest payments in the 2026-27 fiscal year, a sum that vastly exceeds the £90billion designated for defence and falls just short of the £145billion set aside for education.”
Note that the £ 90 billion budgeted for defence is way below the pledge made to NATO of 5per cent of GDP which equals 150 billion pounds a year. a trillion pounds of spending in just 6 years.
Without a reduction in the 3 trillion of debt, annual debt servicing will be £150 billion A YEAR, ( 5 per cent rate on 3 trillion) not 135 billion.
In 6-7 years interest on debt will total ONE TRILLION POUNDS – raising UK debt to 4 TRILLION POUNDS.
That assumes the UK will produce a primary surplus – do not be fooled – a primary deficit or surplus excludes debt servicing costs:
“he UK primary deficit refers to the difference between public sector receipts and expenditures on current and capital items, excluding interest payments and receipts, which are accounted for separately. It measures the underlying structural imbalance between government revenue—primarily from taxes—and the cost of providing public goods and services, without the influence of debt servicing costs.”
“The deficit is expected to fall to around 2% of GDP by 2029/30, driven by higher tax receipts and reduced spending.”
That 2 PER CENT “DEFICIT” NUMBER EXCLUDES interest on 3 trillion of debt – which alone is 4-5 per cent of GDP.
The UK starts with a deficit equal to the gilt yield – currently around 4 pr cent but it did hit 5 per cent in 2025 and is a variable beyond the governments control. If global rates go up, so do UK rates. The creditworthiness and inflation prospects also drive the rate for UK ten-year government bonds.
So, UK national debt is set to breach 3 trillion immediately and 4 trillion in the next 6 years – maybe FIVE TRILLION!!!
Th UK has promised to increase defence spending from 60 billion pounds to150 billion pounds A YEAR – that increase is NOT In either OBR estimates or the budgets of “Rachel from accounts”.
Neither is the recent “agreement” to spend £13 billion to fund replacement grid transmission costs” or other “net zero” plans like building SMR’s, or covering the UK in solar panels and windmills.
nor is the capital required to fund the building of a million new homes at a cost of around £400,000 average, EACH – capital cost £400 billion pounds (these new homes ca be sold on, but right now, the signs are that local councils will be the buyers and funders of the construction (for legal and illegal immigrants!).
None of THE “net zo spending which have been subject to ANY democratic process or tailed debate and accountability.
I guesstimate that In the last ten years, since 2006, “net zero” has cost the economy a quarter of a trillion pounds.
No election manifesto stated this, no parliamentary sub-committee has questioned it, neither has the massive spending featured in any “Budget” – completely unaccountable. The consumer pays via ever escalating utility bills, taxes to fund subsidies and tax breaks, and capital spending is hidden from the public and parliament, ever to be discussed/scrutinised.
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This article (How long before the UK approaches the “event horizon” of bankruptcy and default? 3 trillion pounds of national debt imminent, 4 trillion in the next 2033, 5 trillion by 2040) was created and published by Peter Halligan and is republished here under “Fair Use”
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