Latest news with #nationaldebt
Daily Mail
a day ago
- Business
- Daily Mail
Britain is at the mercy of bond markets as debt spirals, says HUGO DUNCAN
It took the British government more than three centuries to rack up debts of £1trillion. That milestone was reached in 2010, in the wake of the financial crisis. It took just ten more years for our debts to hit £2trillion. They now stand just shy of £2.9trillion – and will hit £3trillion either this fiscal year or next. So that's another trillion racked up in less than a decade. Yes, there's the impact of inflation. And the triple-whammy of the financial crisis, the Covid-19 pandemic and the energy shock after the invasion of Ukraine, all of which pushed the debt higher as the government borrowed to support households and businesses. But as the Office for Budget Responsibility warned in a recent report highlighting the parlous state of the nation's finances, successive governments have failed to take the action required to bring the debt back under control in the wake of those crises. Planned tax rises have been 'reversed', notes the OBR, 'and more significantly planned spending reductions have been abandoned'. That the OBR pointed this out so soon after Labour watered down welfare cuts is telling. Political failings mean the national debt remains stuck at close to 100 per cent of national income – the highest level since the 1960s – with little sign of improvement in sight. And the government's annual borrowing bill has hovered around 5 per cent of GDP a year since the pandemic – levels only previously seen during recession or war. This is a major headache for Rachel Reeves ahead of the Budget this autumn. And that spells yet more pain for households and businesses – because however the Chancellor spins it, another round of tax rises are coming. They will be big. And they will be painful. This is because, far from being a 'beacon of stability' in an uncertain world, as Downing Street would have us believe, Britain is at the mercy of the bond markets. One only has to look back at the Liz Truss debacle to know that twitchy bond markets matter. And twitchy they are. To such an extent that UK gilt yields – a key measure of how much it costs the British government to borrow – are the highest in the G7. In fact, the UK has the third-highest borrowing costs of any advanced economy after New Zealand and Iceland. This is because international investors look at Britain – with its soaring debts and lack of political will to do anything about it – and do not like what they see. So they charge the UK government more to lend it money than almost every other similar economy in the world. To understand what that means one only has to look at the today's figures from the Office for National Statistics that show the UK paid £16.4billion of interest on the national debt in June alone. This was £8.4billion more than in the same month last year and the second highest June on record, amounting to nearly £550million a day and more than £22million an hour. So we are now in a situation where we are forecast to spend £111billion this year servicing the national debt – and just £62.2billion on defence. With the economy slowing, fears are mounting that the fiscal situation is getting worse not better. The scene is set for another punishing Budget this autumn.
The Guardian
a day ago
- Business
- The Guardian
Trump tax bill to add $3.4tn to US debt over next decade, new analysis finds
Donald Trump's new tax bill will add $3.4tn to the national debt over the next decade, according to new analysis from the nonpartisan Congressional Budget Office (CBO) released Monday. Major cuts to Medicaid and the national food stamps program are estimated to save the country $1.1tn – only a chunk of the $4.5tn in lost revenue that will come from the bill's tax cuts. The cuts will come through stricter work requirements and eligibility checks for both programs. The CBO estimates the bill will leave 10 million Americans without health insurance by 2034. The bill also makes permanent tax cuts that were first introduced by Republicans in Trump's 2017 tax bill. The cuts included a reduction in the corporate tax rate, from 35% to 21%, and an increase to the standard deduction. It also includes a tax dedication for workers receiving tips and overtime pay, and removes tax credits that support wind and solar power development, which could ultimately raise energy costs for Americans. Increased costs will also come from boosts to immigration and border security funding. The bill allocates nearly $170bn to immigration law enforcement, including the Immigrations and Customs Enforcement (Ice) agency and funding for a wall along the southern border. The Committee for a Responsible Federal Budget estimates that, with interest, the bill will actually add $4.1tn to the deficit. The US national debt currently stands at more than $36tn. 'It's still hard to believe that policymakers just added $4tn to the debt,' Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement. 'Modelers from across the ideological spectrum universally agree that any sustained economic benefits are likely to be modest, or negative, and not one serious estimate claims this bill will improve our financial situation.' Trump signed the bill into law earlier this month after weeks of debate among congressional Republicans. The bill passed the Senate 51-50 before it passed the House 218-214. While Republicans largely celebrated the bill, with Trump calling it 'the most popular bill ever signed in the history of the country', only a quarter of Americans in a CBS/YouGov poll said that the bill will help their family. Democrats meanwhile universally criticized the bill, with Ken Martin, chair of the Democratic National Committee saying that while 'the GOP continues to cash their billionaire donors' checks, their constituents will starve, lose critical medical care, lose their jobs – and yes, some will die as a result of this bill.'
The Guardian
a day ago
- Business
- The Guardian
Trump tax bill to add $3.4tn to US debt over next decade, new analysis finds
Donald Trump's new tax bill will add $3.4tn to the national debt over the next decade, according to new analysis from the nonpartisan Congressional Budget Office (CBO) released Monday. Major cuts to Medicaid and the national food stamps program are estimated to save the country $1.1tn – only a chunk of the $4.5tn in lost revenue that will come from the bill's tax cuts. The cuts will come through stricter work requirements and eligibility checks for both programs. The CBO estimates the bill will leave 10 million Americans without health insurance by 2034. The bill also makes permanent tax cuts that were first introduced by Republicans in Trump's 2017 tax bill. The cuts included a reduction in the corporate tax rate, from 35% to 21%, and an increase to the standard deduction. It also includes a tax dedication for workers receiving tips and overtime pay, and removes tax credits that support wind and solar power development, which could ultimately raise energy costs for Americans. Increased costs will also come from boosts to immigration and border security funding. The bill allocates nearly $170bn to immigration law enforcement, including the Immigrations and Customs Enforcement (Ice) agency and funding for a wall along the southern border. The Committee for a Responsible Federal Budget estimates that, with interest, the bill will actually add $4.1tn to the deficit. The US national debt currently stands at more than $36tn. 'It's still hard to believe that policymakers just added $4tn to the debt,' Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement. 'Modelers from across the ideological spectrum universally agree that any sustained economic benefits are likely to be modest, or negative, and not one serious estimate claims this bill will improve our financial situation.' Trump signed the bill into law earlier this month after weeks of debate among congressional Republicans. The bill passed the Senate 51-50 before it passed the House 218-214. While Republicans largely celebrated the bill, with Trump calling it 'the most popular bill ever signed in the history of the country', only a quarter of Americans in a CBS/YouGov poll said that the bill will help their family. Democrats meanwhile universally criticized the bill, with Ken Martin, chair of the Democratic National Committee saying that while 'the GOP continues to cash their billionaire donors' checks, their constituents will starve, lose critical medical care, lose their jobs – and yes, some will die as a result of this bill.'
Wall Street Journal
3 days ago
- Business
- Wall Street Journal
An Economic Agenda for the Class of 2028
Despite their political differences, Donald Trump and Joe Biden seem to agree on economics. Both believe the White House should direct the American economy by favoring companies and courtiers. Younger potential leaders from both parties with 2028 ambitions should be positioning themselves as alternatives to Trump-and-Biden-omics. Presidents Trump and Biden have been big spenders, exploding the national debt. Both erected barriers to trade to protect friendly interests, which were then supposed to dance to presidential tunes. Both viewed the U.S. economy nostalgically and favored older industries. Mr. Trump ignores America's competitive edge in the services trade, and Mr. Biden embraced the progressive wing's suspicion of tech.
Bloomberg
15-07-2025
- Business
- Bloomberg
Billionaires John and Laura Arnold Decry ‘Catastrophic Deficit' in Trump Tax Law
Billionaire philanthropists John and Laura Arnold have made fiscal responsibility a signature cause, going so far as to release a 20-step plan for the US to save up to $4 trillion. So when Congress passed President Donald Trump's 'Big Beautiful Bill' — which budget watchdogs say could add more than $5 trillion to the national debt — they called it 'catastrophic.'
