The UK is facing a budget crisis, with high debt, slow growth, and low productivity. Economists say the problem is not insurmountable but that the political system is unable to tackle it. Chancellor Rachel Reeves needs to balance pro-growth initiatives with fiscal restraint to address the issue.
Some experts believe the problem is fixable, citing that only 2% of GDP is needed to stabilize debts. However, forecasts released before the Labour conference suggest the chancellor’s task has become more challenging, including a predicted inflation rate of 1% and reduced productivity estimates.
Others argue for a complete “reset” of the UK economy, pointing to decades of anaemic economic growth, energy price regulation, and inflexible labor markets as major contributors. With limited levers available to Reeves, she may need to raise taxes again or consider changes to policies.
The situation is complex, but one thing is certain: the UK government must act to address its fiscal problems before they become too costly.
Source: https://theweek.com/business/economy/are-the-uks-fiscal-problems-too-big-to-fix