[Tim McLoughlin] UK government debt in context

[Tim McLoughlin]

A couple of charts on an A-level tutorial site, Economics Help shows in context the level of UK government debt over time:

This shows that despite the recent increase in government debt after the bailout of the banks, we're at historically low levels.

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Posted By Tim McLoughlin to Tim McLoughlin on 3/06/2012 11:35:00 AM

[Eamonn]

Tim,

 

Your comment is slightly disingenuous; from the graph, the current debt as a proportion of GDP is at its highest level since the mid sixties when the combination of post war economic growth and the reduction of the debt incurred during the Second World War had brought that proportion down.

 

Britain is currently experiencing very low levels of growth and the recent rise in debt as a proportion of GDP is at its steepest since the 1940s but Britain is not at war. Of course the rapid increase in debt is explained by the global financial collapse in 2008 and the need to protect the economy from the consequences of that collapse, but the British population are unlikely to accept austerity levels similar to the post war period nor is the economy likely to grow at rates equal to those during the post war boom in the foreseeable future.

 

The countries of the Eurozone are having severe difficulties re-financing their debt even though some of them have a proportion of debt to GDP that is similar to that of Britain and, in a global financial market Britain is not seen as such a safe country to which to lend by internal investors or foreign sovereign funds as it was during and after the Second World War.

 

 

 

Eamonn