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.
Police bodycam footage allegedly shows a Palestine Action activist attacking police with a sledgehammer during a break-in at an Israel-based defence firm’s UK site, a court has heard.
Prosecutors say six members of the group wearing red boiler suits used a prison van to gain entry to an Elbit Systems UK factory in Bristol during a “meticulously organised” attack in the early hours of 6 August last year.
Charlotte Head, 29, Samuel Corner, 23, Leona Kamio, 30, Fatema Rajwani, 21, Zoe Rogers, 22, and Jordan Devlin, 31, are jointly accused of aggravated burglary, criminal damage and violent disorder. They deny all charges.
Corner denies an additional charge of causing grievous bodily harm. He is accused of striking police sergeant Kate Evans on the back with a sledgehammer at the scene, leaving her with a fracture to her lumbar spine.
PS Evans, PC Aaron Buxton and PC Peter Adams gave evidence at Woolwich Crown Court on Monday and jurors were shown police bodycam footage of officers confronting the suspects.
Officers saw a security guard covered in foam as they arrived at the factory, where activists had allegedly splattered red paint around and were smashing the company’s property with sledgehammers, the jury heard.
One clip shows a man, allegedly Corner, swinging a sledgehammer at PC Buxton as he lay on his back amid a struggle with another suspect.
“As he has reached us he has swung the sledgehammer multiple times towards me,” PC Buxton said.
“I was scared. I believe it made contact with my right calf and my work radio. I had quite considerable pain down that area of my leg following it and also I had some bruising come up.”
PC Buxton told jurors he then saw the man strike PS Evans in the back as she was kneeling down trying to arrest another suspect.
Giving evidence, PS Evans said: “I can remember looking up and PC Adams for some reason had a shocked face on him, and then I had a pain in my back.
“It was just a massive shock vibrating through my whole back, a thud on my back through my whole body extended down to my legs.”
She added: “I think I was stunned to begin with, I didn’t know what it was, I had no idea and I can remember looking round and seeing a male with a sledgehammer behind me.”
PS Evans told jurors she thought her “spine was shattered”, saying: “I can remember putting my right foot down and pain shot up.”
When other officers arrived and helped to arrest the suspects, PS Evans went to check on Corner when he complained that his handcuffs were too tight, jurors heard.
“We still have a duty of care to make sure no one is in pain,” she said. “They seemed perfectly fine to me.”
PS Evans said that Corner was accusing officers of being “complicit in genocide” and said “something about murdering babies”.
“I said something like ‘you have just hit me with a sledgehammer’, and he didn’t recognise that at all, he just started telling me I’m complicit in genocide again,” she added.
PS Evans said she needed help getting in and out of the shower after the incident and took painkillers to deal with the “intense pain”.
Jurors have heard that PS Evans was unable to work for three months after the incident.
The court has heard that Elbit Systems UK manufactures defence technology equipment and is a UK-registered company whose parent company is based in Israel.
Jurors have been told that the allegations in this case came before Palestine Action’s proscription under terrorism laws in June.
Prosecutors told the jury that the ban is not relevant to the evidence in this case.
Reports of a “board-level orchestrated coup” at the BBC are “complete nonsense”, non-executive director Sir Robbie Gibb has told MPs.
Sir Robbie, whose position on the BBC board has been challenged by critics in recent weeks, was among senior leaders, including the broadcaster’s chair, Samir Shah, to face questions from the Culture, Media and Sport committee about the current crisis.
The hearing took place in the wake of the fallout over the edit of a speech by US President Donald Trump, which prompted the resignation of the corporation’s director-general and the chief executive of BBC News, and the threat of a lawsuit from the US president.
Image: Former BBC editorial adviser Michael Prescott wrote the memo that was leaked. Pic: PA
Former editorial adviser Michael Prescott, whose leaked memo sparked the recent chain of events, also answered questions from MPs – telling the hearing he felt he kept seeing “incipient problems” that were not being tackled.
He also said Mr Trump’s reputation had “probably not” been tarnished by the Panorama edit.
During his own questioning, Sir Robbie addressed concerns of potential political bias – he left BBC News in 2017 to become then prime minister Theresa May’s director of communications, a post he held until 2019, and was appointed to the BBC board in 2021 by Boris Johnson.
Image: BBC board member Sir Robbie Gibb appearing before the Culture, Media and Sport committee. Pic: PA
“I know it’s hard to marry the fact that I spent two years as director of communications for the government… and my genuine passion for impartiality,” he said.
“I want to hear the full range of views… I don’t want the BBC to be partisan or favour any particular way.”
Asked about reports and speculation that there has been a “board-level orchestrated coup”, Sir Robbie responded: “It’s up there as one of the most ridiculous charges… People had to find some angle.
“It’s complete nonsense. It’s also deeply offensive to fellow board members… people of great standing in different fields.”
He said his political work has been “weaponised” – and that it was hard as a non-executive member of the BBC to respond to criticism.
‘We should have made the decision earlier’
Image: BBC chair Samir Shah also answered questions. Pic: PA
Mr Shah admitted the BBC was too slow in responding to the issue of the Panorama edit of Mr Trump, which had been flagged long before the leaked memo.
“Looking back, I think we should have made the decision earlier,” he said. “I think in May, as it happens.
“I think there is an issue about how quickly we respond, the speed of our response. Why do we not do it quickly enough? Why do we take so much time? And this was another illustration of that.”
Following reports of the leaked memo, it took nearly a week for the BBC to issue an apology.
Mr Shah told the committee he did not think Mr Davie needed to resign over the issue and that he “spent a great deal of time” trying to stop him from doing so.
Is director-general role too big for one person?
Image: Tim Davie is stepping down as BBC director-general
Asked about his own position, Mr Shah said his job now is to “steady the ship”, and that he is not someone “who walks away from a problem”.
A job advert for the BBC director-general role has since gone live on the corporation’s careers website.
Mr Shah told the hearing his view is that the role is “too big” for one person and that he is “inclined” to restructure roles at the top.
He says he believes there should also be a deputy director-general who is “laser-focused on journalism”, which is “the most important thing and our greatest vulnerability”.
Earlier in the hearing, Mr Prescott gave evidence alongside another former BBC editorial adviser, Caroline Daniel.
He told the CMS committee that there are “issues of denial” at the BBC and said “the management did not accept there was a problem” with the Panorama episode.
Mr Prescott’s memo highlighted concerns about the way clips of Mr Trump’s speech on January 6 2021 were spliced together so it appeared he had told supporters he was going to walk to the US Capitol with them to “fight like hell”.
‘I can’t think of anything I agree with Trump on’
Mr Trump has said he is going to pursue a lawsuit of between $1bn and $5bn against the broadcaster, despite receiving an official public apology.
Asked if the documentary had harmed Mr Trump’s image, Mr Prescott responded: “I should probably restrain myself a little bit, given that there is a potential legal action.
“All I could say is, I can’t think of anything I agree with Donald Trump on.”
He was later pushed on the subject, and asked again if he agreed that the programme tarnished the president’s reputation, to which he then replied: “Probably not.”
Mr Prescott, a former journalist, also told the committee he did not know how his memo was leaked to the Daily Telegraph.
“At the most fundamental level, I wrote that memo, let me be clear, because I am a strong supporter of the BBC.
“The BBC employs talented professionals across all of its factual and non-factual programmes, and most people in this country, certainly myself included, might go as far as to say that they love the BBC.
He said he “never envisaged” the fallout that would occur. “I was hoping the concerns I had could, and would, be addressed privately in the first instance.”
Asked if he thinks the BBC is institutionally biased, he said: “No, I don’t.”
He said that “tonnes” of the BBC’s work is “world class” – but added that there is “real work that needs to be done” to deal with problems.
Mr Davie, he said, did a “first-rate job” as director-general but had a “blind spot” toward editorial failings.
Police have appealed for information after a man was charged with murdering two women and raping a third.
Simon Levy has been charged with murdering 53-year-old Carmenza Valencia-Trujillo who died on the Aylesbury Estate, south-east London, on 17 March, the Metropolitan Police said.
In September, Levy, of Beaufoy Road, Tottenham, north London, was charged with murdering 39-year-old Sheryl Wilkins who was found unresponsive in High Road, Tottenham, on 24 August.
He is also accused of grievous bodily harm with intent, non-fatal strangulation and two counts of rape against a third woman, who cannot be named for legal reasons, in Haringey, north London, on 21 January, police said.
The 40-year-old will appear at Westminster Magistrates’ Court on Tuesday charged with Ms Valencia-Trujillo’s murder.
Image: Sheryl Wilkins was found unresponsive in High Road, Tottenham, on 24 August. Pic: Metropolitan Police
He is also due to appear at the Old Bailey on Wednesday for a plea and trial preparation hearing for the murder of Ms Wilkins.
Detectives believe there may be individuals who have information relevant to this investigation – or who are yet to report incidents which have directly impacted them – and are asking for people to come forward.
This breaking news story is being updated and more details will be published shortly.