British debt might increase by 25 billion GBP in 2019-2020, due to economy delay following the Brexit. The experts forecast that in fiscal 2019-2020 the British economy will observe slower growth, which will lead to increased lending and government debt, while the tax revenues will decrease by 31 billion GBP. This amount may be partially offset by the contributions to the European budget, which amounts to 6 billion GBP, but largest part should come from government debt.
The net effect of higher lending will lead to a deficit of 14.9 billion GBP, instead of the aimed surplus of 10.4 billion GBP, which was earlier set by former finance minister George Osborne.
Even before the referendum in June the government of Conservative Party has violated two of the three budgetary targets and planned further tax increases, cuts in social payments and real cuts to public services. The authorities are trying to clear the relatively high deficit until 2019-2020.
After the referendum almost all economic analysts, including the Bank of England, lowered its forecast for economic growth in the UK. This definitely will lead to cuts in spending and increase of the country’s debt.
Currently the British debt amounts to more than 1.6 trillion GBP, which is 82.6% from GDP. George Osborne set a mission to reduce the size of this debt to 74.7% from GDP until 2020, but resigned from his position after the Brexit referendum. After that the country experiences serious economy worsening, devaluation of the British pound and dark forecasts for the future.
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