Government debt will rise to 140% of GDP, think tank forecasts
High levels of national debt will hurt the UK’s ability to fund public services and respond to economic crises, a think tank has said.
Not in the last 300 years has there been as large a peace time increase in the amount of government borrowing, the Resolution Foundation said.
In the last 15 years alone there’s been a trebling of the ratio of debt to a measure of economic output, called gross domestic product (GDP), the foundation’s Built to Last report said.
Since 2007 the UK’s debt-to-GDP ratio grew from 36% to 100% of GDP in May this year.
The knock-on effect is difficulty in funding services and increasing spending in the event of potential future economic crises, the report said.
And the debt ratio will rise further, according to the report authors.
They forecast it will reach roughly 140% of GDP over the next 50 years if current market expectations are correct – that the UK continues to have high interest rates in the longer term.
Present market expectations, according to market data provider Refinitiv, are that the Bank of England’s base rate will remain above 5% to the end of December 2024.
The central bank has brought up interest rates to 5.25%, making borrowing more expensive and saving more rewarding, in an effort to take money out of the economy in an effort to reduce spending and bring down inflation.
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Rate of inflation fails to fall
Inflation, the rate of price rises, has remained stubbornly high after COVID-19 era supply chain problems pushed up costs, and was significantly worsened by the energy price highs seen after Russia’s invasion of Ukraine.
Each percentage point rise in the base interest rate is adding around £15bn to government borrowing costs in five years’ time as the amount owed on that debt goes up, the report said.
That cost could therefore rise to roughly 5% of GDP – the highest for more than 70 years, it added.
Reducing state debt has political significance as Prime Minister Rishi Sunak has made it one of his five priorities to bring down borrowing.
The report contains criticism of government spending and calls for new a monetary policy for the Bank of England.
Specifically, two forms of state support were poorly targeted, the report said; the “generous” grants to self-employed workers who did not report income falls in the COVID-19 years and the universal nature of household energy supports – such as the energy price guarantee – given to customers up to the end of June to deal with energy bills.
Had the schemes been targeted to those who needed financial help, their overall cost could have been reduced by £35bn, the Resolution Foundation said.
Monetary policy should be changed with the target rate of inflation brought up from 2% to 3%, the report added, but this should only be done when interest rates are low again and when the rate of inflation has reached the current 2% goal.
A brother and sister have been jailed for the murder of a drug dealer in a “ferocious” knife attack.
Isaiah Marsh, 21, and his 23-year-old sibling Mya Marsh were sentenced to a minimum of 20 years in prison for killing Minister Enfrence, 21, in a row over a £200 cannabis debt.
Bank worker Mya was trying to buy drugs from Mr Enfrence in Kings Norton, Birmingham, when she met him armed with a kitchen knife at about 10am on 5 November, the city’s crown court heard.
Judge Simon Drew KC said that Mya was the aggressor in an initial confrontation with Mr Enfrence over the debt as he sentenced the siblings on Thursday.
Mya called her brother Isaiah to the scene, who “launched a ferocious attack on Minister as he lay defenceless on his back on the floor” and had intended to kill, the judge said.
Mr Enfrence suffered at least 12 stab wounds to his body, arms, hands and head in the “unprovoked” attack.
He did not die instantly and managed to escape before collapsing nearby.
Judge Drew said footage of the attack, which was caught on CCTV, was “truly sickening” to watch as Mr Enfrence died a “traumatic and painful death”.
Minister Enfrence was killed on 5 November. Pic: West Midlands Police
Siblings unanimously convicted of murder
The footage shows Mya passing a knife to her brother during the stabbing.
The judge told them: “This was an attack by two people on one. That attack was unprovoked. Members of the public, including a child in a pushchair, passed very close by while the attack was taking place.”
After the killing, Mya went to work “as if nothing had happened” after taking the morning off work, citing mental health problems, the court was told.
Isaiah later handed himself in to the police.
A jury unanimously convicted the siblings of murder on Monday following a three-week trial.
Both had denied murder and alternative charges of manslaughter.
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Isaiah claimed he acted in self-defence, while Mya claimed she did not believe her brother would use the knife to stab Mr Enfrence.
Rachel Brand KC, representing Mya, said the attack was “utterly out of character” for her client and that Mya had shouted “stop it” and “break it up” during her brother and Mr Enfrence’s struggle.
Isaiah, meanwhile, would find it “almost impossible to reconcile what he saw on the CCTV with who he is”, his barrister Michael Ivers KC told the court.
“He has told everyone who will listen when they have spoken to him that he is full of remorse about what happened,” Mr Ivers said.
Police investigating the torture and killing of a pair of kittens in west London have published CCTV pictures of two teenagers they want to speak to.
Warning: This article contains details some readers may find distressing
The Metropolitan Police were tipped off on 3 May that two teenagers had allegedly dismembered the animals at Ickenham Road, Ruislip.
No arrests have been made.
Officers released footage of a boy and a girl on Thursday and asked people to help identify them.
The boy is described by the Met as 5ft 6in (168cm) tall, with short dark hair. He was wearing a dark jacket with long sleeves, with blue jeans.
Police sergeant Babs Rock said the boy “was also seen carrying a black duffel bag, which sadly is thought to have contained the kittens”.
The two youths. Pic: Metropolitan Police/PA
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Sergeant Rock said the young girl was the same height as the boy, with long red hair.
“She was wearing a white top with black shorts. She was also carrying a purple jumper, which she later puts on to wear,” she said.
“If you know these two individuals then please come forward to us, we would like to speak with them as soon as possible.”
In the video, the pair are seen walking down a street and then later running back the way they came.
Sergeant Rock described it as “an incredibly distressing incident which I know has caused concern in the local community”.
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