Rachel Reeves is facing mounting criticism over her orthodox fiscal management, with concerns that cuts in public spending could adversely affect vulnerable groups during a time of increasing wealth inequality. Critics argue that her approach to improving living standards is insufficient and that more radical economic reforms are necessary. With significant debt financing costs and limited budget flexibility, there are fears that the UK is reaching its borrowing limits, particularly in comparison to other nations like France with more aggressive fiscal strategies. Options for policymakers appear limited and increasingly scrutinized.
Asking the international money markets to lend the UK more money was like a free lunch in the years after the 2008 financial crash.
Reeves will spend more than 100bn on debt financing in the next financial year on a budget of 1.2tn.
Economists have tried to define how much borrowing is too much and always failed, which leaves the financial markets to decide.
The UK, which has a lower level of productivity than France and a more open economy, seems to have hit the buffers when nearing the 100% debt to GDP ratio.
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