Rachel Reeves might need a stiff drink, and it’s only Tuesday. The Chancellor of the Exchequer has been handed a spreadsheet by the analysts at Barclays that reads less like a fiscal forecast and more like the script for a disaster movie. The headline figure is enough to make anyone’s eyes water: the UK is on course to borrow nearly one trillion pounds over the next four years. Let that sink in for a moment. A thousand billion quid. It’s a number so vast it ceases to have any tangible meaning; it’s just a row of zeros that represents a millstone around the neck of the next generation.
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How did we get here? Well, it’s the perfect storm, isn’t it? The Debt Management Office has to roll over a mountain of gilts issued during the low-interest-rate heyday, except now those gilts have to be refinanced at yields that are significantly higher. It’s like coming off a fixed-rate mortgage deal straight onto the lender’s standard variable rate—only instead of your semi in Croydon, it’s the entire United Kingdom’s credit card bill. The interest payments on the national debt are now forecast to dwarf the budget for defence, schools, or even the hallowed NHS in some quarters. This is the “fiscal straightjacket” everyone in Westminster whispers about but nobody wants to admit they’re wearing.
