The UK Debt Dilemma

The UK faces a significant economic challenge, with national debt nearing 100% of GDP and low growth rates since the pandemic. The Chancellor of the Exchequer, Rachel Reeves, must navigate between stimulating the economy and maintaining fiscal credibility amidst increasing pressures to both spend and save. Despite the need for public investment to kickstart growth, constraints on tax hikes limit her options, leading to a tough balance between meeting fiscal rules and addressing public service funding. Analysts suggest the UK is trapped in a cycle of low investment, productivity, and growth, exacerbated by external factors such as Brexit.