Arab Press

بالشعب و للشعب
Saturday, Jul 12, 2025

No-deal Brexit 'to push UK debt to 50-year high'

No-deal Brexit 'to push UK debt to 50-year high'

Government borrowing would reach its highest level in more than half a century, a think tank warns.

Even a "relatively benign" no-deal Brexit would push UK debt to its highest since the 1960s, the Institute for Fiscal Studies (IFS) has said.

The think tank said borrowing was likely to rise to £100bn and total debt would soar to 90% of national income.

"The government is now adrift without any effective fiscal anchor," said IFS director Paul Johnson.

The Treasury said any decisions would be made "with a view to the long-term sustainability of the public finances".


Spending rules


The gloomy forecasts are part of the IFS Green Budget, looking at the challenges facing Chancellor Sajid Javid as he prepares for his first Budget.

The IFS's Mr Johnson said: "Given the extraordinary level of uncertainty and risks facing the economy and public finances, it [the government] should not be looking to offer further permanent overall tax giveaways in any forthcoming Budget.

"In the case of a no-deal Brexit, though, it should be implementing carefully targeted and temporary tax cuts and spending increases where it can effectively support the economy."

The next election: What will the parties promise?

A simple guide to Brexit

Will Johnson's Brexit plan work for business?

But even before the cost of a possible no-deal Brexit is factored in, the think tank said the government was set to break its own spending rules.

The IFS forecasts that annual borrowing - the difference between what the government spends and what it receives through, for example, taxation - will top £50bn next year.

That will be about 2.3% of gross domestic product (GDP), a measure of national income. Under current spending rules the government can only borrow up to 2% of national income.

The think tank said the government's current plans for day-to-day spending next year are closer to the levels proposed by Labour's 2017 manifesto than plans laid out by the Conservative party at the time.

An HM Treasury spokesperson said: "September's spending round supported the people's priorities of health, education and the police within the existing fiscal rules, as we said it would be.

"Beyond that, the chancellor has already said that we will be reviewing the fiscal framework as we turn the page on austerity. In so doing, we will retain a fiscal anchor to public spending so that decisions are taken with a view to the long-term sustainability of the public finances."

A doubling in the annual budget deficit, leading, in relation to the size of the economy, to the highest government debt since the 1960s.

These are the new forecasts of the independent Institute for Fiscal Studies for how a no-deal Brexit is likely to drench the UK's public finances in red ink. Only on the extraordinary scale of the fiscal collapse of the 2008 financial crisis are these numbers modest.

On any ordinary scale they do matter - an annual deficit heading back up towards £100bn, and national debt closer to 90% of GDP for the first time in half a century.

And all this comes at a time where the institute concludes that the government is no longer taking its own fiscal rules seriously, borrowing more to spend more on public services even as the Treasury approaches its self-imposed limits.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Qatar Airways Clears Backlog of Passengers Following Missile Threats
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×