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.
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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.
Anthony Joshua missed out on the chance to become a three-time heavyweight world champion after he was stopped by British rival Daniel Dubois in the fifth round.
Dubois, 27, knocked down Joshua towards the end of the opening round with an overhand right to the 34-year-old’s chin.
The IBF heavyweight champion then dropped Joshua at the end of round three and twice in the fourth.
A right hook ended the fight with a knockout for Dubois’ first defence of the title.
The fighters went toe to toe at London’s Wembley Stadium in front of a record 96,000 fans.
‘We came up short’
Minutes after retaining the IBF championship, Dubois shouted to the crowd “are you not entertained?” before saying: “I’m a gladiator, you know?
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“I’m just a warrior to the bitter end. I’m just ready to go. I want to go to the top level of this game and reach my potential. God bless you all.”
Joshua said the loss would not stop him from rebuilding despite admitting “we came up short”.
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“You know I’m ready to kick off in the ring, but I’m going to keep my cool, keep very professional, and give respect to my opponent,” he said.
“I’m always saying to myself I’m a fighter for life… We keep rolling the dice. I had a sharp opponent, a fast opponent and a lot of mistakes from my end, but that’s the game.”
Dubois’ victory has sent a message to the whole heavyweight division
Daniel Dubois will feel like he has fulfilled his destiny here at Wembley. His father has trained him to be a champion boxer since he was tiny.
He held the IBF belt, but he has gone in there tonight and defended it in spectacular fashion – he is now in every conversation going forward.
What now for AJ? Can he face rebuilding? And will he even want to?
The Wembley ring walk is notoriously long, and Dubois looked nervous – but so did Joshua, who has done this many times before in front of a full house.
Perhaps he was thinking of what was at stake – the chance to be a three-time heavyweight champion of the world.
But 27-year-old Dubois holds the belt and was keen to prove he was a worthy champion quickly.
Many wondered if Dubois would freeze on the biggest stage: Question asked and answered emphatically.
It was a crushing defeat for Joshua – most were not expecting such a one-sided victory.
Dubois will now most likely take on the winner of Fury v Usyk 2 for all the belts. But the manner of his victory has sent a message to the whole heavyweight division.
Hearn: AJ will want rematch
Promoter Eddie Hearn then said “it was the first round” where Joshua lost, “after that he was fighting on heart and desire”.
Hearn added: “When you are in there with a massive puncher this is what can happen. He never stopped trying to get up, even when he couldn’t get up.
“Daniel deserves credit, he’s a real world champion. Congratulations to him… I’m sure [Joshua will] exercise that rematch clause, it’s a given, it’s a dangerous fight because he’s growing in confidence all the time but he’ll believe he can beat him.”
British champion Dubois, who before tonight had never fought at Wembley, was elevated to the IBF title holder after Oleksandr Usyk relinquished the belt.
Joshua outweighed Dubois by four pounds, despite a career-heaviest weight for his rival, ahead of the fight.
Among those watching was Tyson Fury, the former WBC heavyweight champion, who took a ringside seat.
Fury is set to fight Usyk for the other three titles in a rematch on 21 December.
Ahead of the fight, Liam Gallagher played some of Oasis’ biggest hits to the sold-out crowd.
The 52-year-old frontman walked on to a massive cheer and said “yes Wembley vibes in the air,” before launching into Rock ‘N’ Roll Star, Supersonic and Cigarettes & Alcohol.
He and Noel Gallagher will play Wembley for their first of seven reunion shows at the stadium on 25 July – 307 days away.
Other famous faces ringside were Irish MMA fighter Conor McGregor, former boxer Ricky Hatton, Spice Girl Emma Bunton and Love Island presenter Maya Jama.
The former head of royal protection says he warned the Royal Family about Mohamed al Fayed’s reputation before Princess Diana took her sons on holiday with him.
The women say he raped and sexually assaulted them while they worked at the luxury department store, prowling the shop floor and “cherry-picking” women to be brought to his executive suite.
Now, Mr Davies says people were aware of the Egyptian businessman’s reputation as far back as the 1990s, and that he raised concerns about him to the Royal Family.
“This was a man who I would be concerned [about] if a relative of mine was going on holiday with him, let alone the future king and his brother and their mother, Princess Diana,” Dai Davies told Sky News.
In July 1997, a month before she died, Princess Diana went on holiday with Fayed and his wife to their residence in St Tropez.
She took the two young princes with her – a holiday Prince Harry described as “heaven” in his 2023 memoir Spare.
“I was horrified because I was aware of some of the allegations even then that were going around,” said Mr Davies.
“I was aware that he had tried very hard to ingratiate himself with the Royal Family and obviously knowing, as I did, the reputation he was alleged [to have] then, I was concerned, and I took the opportunity to inform the Royal Family.”
Mr Davies says he was told: “Her Majesty is aware.”
“The rest is history,” he said.
Buckingham Palace told Sky News it had no comment on the allegations.
Fulham ‘deeply disturbed’ by allegations
Fulham FC, a football club that was owned by Fayed between 1997 and 2013, has saidit is “deeply troubled” by the dozens of “disturbing” sexual abuse allegations against the businessman.
The Premier League club also said it is “in the process of establishing whether anyone at the club is or has been affected” by this alleged behaviour.
However, Gaute Haugenes, who managed the club’s women’s team between 2001 and 2003, told the BBC extra precautions were taken to protect female players from Fayed.
“We were aware he liked young, blonde girls. So we just made sure that situations couldn’t occur. We protected the players.”
The legal team involved in a civil claim against Harrods for allegedly failing to provide a safe system of work for its employees said they aimed to seek justice for the victims of a “vast web of abuse”.
An investigation has been launched after “Jail Starmer” graffiti was daubed on the window of an MP’s office.
The Met Police received an allegation of criminal damage on Saturday in relation to the incident at Clive Efford’s office in Eltham & Chislehurst, South London.
This is a new seat which was won by Labour at the general election, though in 2019 it was notionally Conservative.
On Friday night the window was painted with white graffiti which says “Jail Starmer”.
Sources told Sky News’ political editor Beth Rigby that an image of the vandalism has been circulating among Labour MPs’ WhatsApp groups this morning. However, Mr Efford has downplayed the incident.
There have been growing concerns about the safety of politicians in recent years, following the murders of Jo Cox and Sir David Amess.
MPs have described working in an increasingly hostile environment, with experiences ranging from death threats and abuse to attacks on their constituency offices and protests at their homes.
In a statement, the Met Police said: “On Saturday 21, September, police received an allegation of criminal damage to an office building in Westmount Road SE9.
“Graffiti had been daubed on the premises the previous day.
“An investigation has been launched and enquiries are ongoing.
“Anyone with information is asked to call 101 quoting CAD 2672/21Sep.”