Britain's debt burden would jump to its highest level in 50 years if it leaves the EU without a deal, a leading think-tank warned Tuesday. The Institute for Fiscal Studies (IFS) said that due to Prime Minister Boris Johnson's public spending plans, government borrowing was set to top £50 billion ($61 billion, 56 billion euros), equal to 2.3 percent of GDP, or total national economic output.
The figure is double what the Office for Budget Responsibility public body was forecasting in March, four months before Johnson took office pledging a public services spending boost. It also breaks the government's self-imposed fiscal rule of keeping borrowing to below two percent of GDP in order to balance the books by the mid-2020s. The IFS economic research institute said that even a relatively benign no-deal Brexit would likely lead to borrowing approaching £100 billion or four percent of GDP.
As a result, accumulated national debt would climb to almost 90 percent of GDP (Gross Domestic Product) for the first time since the mid-1960s, the IFS said. Britain is due to leave the European Union on October 31, with or without a Brexit deal, according to Johnson. Without a deal, Johnson's planned mini-boom in public spending would likely be followed by another bust as the government struggled to deal with the consequences of a smaller economy and higher debt for funding public services, the IFS said.
Copyright Agence France-Presse, 2019
Comments
Comments are closed for this article.