The Briefing Room

Should the government worry about debt?

9 snips
Aug 7, 2025
Duncan Weldon, an economist and author, joins Mehreen Khan and Chris Giles, economics editors at The Times and Financial Times respectively. They delve into the UK's soaring national debt, escalating from £1.8 trillion to £2.8 trillion, and the implications for government spending and market trust. The trio discusses how fiscal policies and historical context shape today’s debt landscape, examining the balance between public perception and financial management. They also draw lessons from Japan and the U.S. on handling national debt and its impact on future generations.
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INSIGHT

Who Owns UK Government Debt?

  • Government debt is best measured as a percentage of national income (GDP), currently about 95-96% for the UK.
  • The debt is held by various groups including the Bank of England, overseas investors, pension funds, and speculators, influencing market volatility.
INSIGHT

Debt Spikes Due to Crises

  • UK debt spikes historically coincide with wars and economic crises like financial crash and pandemic.
  • Each recent shock (banking crisis, pandemic, energy crisis) significantly increased UK government debt levels.
INSIGHT

Debt Servicing Costs Matter

  • Government debt servicing costs depend on how much is owed and the interest rate.
  • UK interest payments have risen to £81 billion in 2024, over 8% of total government spending, compared to £28 billion 20 years ago.
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