The Rest Is Money 129. How Serious Is The UK’s Debt Mess?
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Jan 13, 2025 Dr. Gerard Lyons, an influential economist and Bank of China board member, joins Steph and Robert to dissect the UK's pressing economic dilemmas. They explore the implications of asking China for investments and the future of UK tax strategies. Lyons sheds light on rising borrowing costs tied to inflation and the necessity for structural reforms to bolster confidence. The conversation further navigates the shifting UK-China relationship amidst geopolitical tensions and the urgent need for public spending reforms in a stagnant economic landscape.
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Rising Borrowing Costs
- Rising government borrowing costs are a global issue, impacting countries like the UK, Germany, and the US.
- This rise is influenced by both global economic conditions and domestic policies.
Investor Pessimism
- Investors are pessimistic about the UK's growth prospects, impacting tax revenue and potentially leading to more tax rises.
- The UK faces a double problem of low growth and investor skepticism.
Boosting Growth
- To boost growth, the Chancellor should reassure markets about the fiscal outlook and implement supply-side measures.
- The Chancellor should encourage innovation, investment, infrastructure, and incentives.