Daily Mail

Ballooning debt poses threat to UK economy

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The growing national debt is a major threat to the British economy, a Bank of england official warned last night.

Richard Sharp, a member of the central bank’s Financial Policy Committee, said the country would struggle to recover from another crisis because of the parlous state of the nation’s books.

In a speech at University College London, he pointed out that successive government­s have borrowed more than £1trillion since the financial crisis.

That has pushed the national debt towards £ 1.8trillion, or 87.2pc of national income, leaving the country with little room for manoeuvre when the next disaster strikes.

Sharp, who spent 23 years working for Goldman Sachs before joining the Bank, said: ‘A highly indebted government has less capacity to react to crises. We cannot assume that further shocks do not materialis­e.’

he warned that debt interest payments could spiral from around £40bn a year to as much as £100bn if borrowing costs return to precrisis levels – far more than the Government spends on roads, schools, houses and hospitals.

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