The Bank for International Settlements (BIS) in Switzerland has joined the growing chorus of criticism over Britain’s current financial direction.
The bank is warning that without far more harsh austeriry measures than are currently being considered, interest payments will become a crushing burden for the economy.
They forecast that interest costs for the U.K.’s debt could go from 5% of GDP now to 10% in 10 years.
But here’s the real econometric kicker… even under a ‘baseline scenario’ the BIS thinks interest payments could shoot up to 27% of GDP by 2040. Greece even looks better under their forecasts.
They’re certaintly pulling out all the stops to sound the crisis alarm. As one would expect the opposition jumped all over the report.
Philip Hammond, shadow chief secretary to the Treasury, said: “The BIS just reinforces the warnings that Conservatives have been giving about the debt trap Britain now faces unless we take action: how risky debt means a growing proportion of our national income is going to be taken up by interest payments rather than financing public services.”
Meanwhile, U.K. housing price have rebounded and are accelerating.
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