Why inflation makes Britain's debt the costliest among rich economies

UK government debt interest hit a record high in July, totaling £7.7 billion, increasing the country's debt-servicing costs and raising concerns about its credit rating ahead of upcoming assessments by credit ratings agencies.

cnn.com

Relevant topic timeline:

8/19/2023

The amount Britain owes exceeds its GDP for the first time since 1961—and credit-rating agencies are watching

Britain's public debt load has risen by more than 40% to nearly £2.6 trillion ($3.3 trillion) since the pandemic began, causing concerns about the country's ability to service its liabilities and reigniting questions about its credit rating. The heavy reliance on index-linked bonds and the threat of inflation could further worsen the situation, potentially leading to a negative economic spiral that could last for years. The UK's debt burden is already higher than its entire annual economic output, and without action, it could balloon to three times the GDP over the next half century.

8/22/2023

Public borrowing below forecasts despite July rise

Government borrowing in the UK was lower than expected in July, sparking speculation about possible tax cuts later this year, however, analysts warn that the Chancellor may have little room for such cuts due to weakening economic forecasts and increasing interest rates.

8/25/2023

Household debt is at an all-time high, but 2008 was still worse, report finds

Despite reaching record levels of total credit card debt and household debt, Americans are actually managing their debt better than in the past due to inflation masking the impact on balances and lower debt-to-deposit levels, according to an analysis by WalletHub. However, the rising trajectory of credit card debt and the increasing number of households carrying balances raise concerns, especially considering the high interest rates, which can take more than 17 years to pay off and cost thousands of dollars in interest. Meanwhile, savers have the opportunity to earn higher returns on cash due to higher inflation and interest rates.

8/25/2023

'Mind-blowing' US debt binge amid high interest rates is threatening financial stability, Larry McDonald says

The US government's debt has reached a record high of almost $33 trillion, causing concerns about its impact on the nation's finances and the risk of a debt crisis, according to experts like Larry McDonald, Ray Dalio, and Nouriel Roubini.

9/2/2023

Higher cost of servicing debt putting Canadian government in a bind

The Canadian government is facing higher debt servicing costs as interest rates rise, resulting in billions of additional dollars spent on interest payments and less money available for other government priorities, potentially leading to difficult decisions about cutting spending or increasing taxes.

9/12/2023

UK Unemployment Rises as Job Vacancies Dip, But Wages Keep Growing

British pay growth hits a record high, potentially leading the Bank of England to raise interest rates again, despite a cooling labor market with rising unemployment and falling job vacancies.

9/14/2023

UK Interest Rates Set to Hit 15-Year High as BoE Battles Inflation

The Bank of England (BoE) is expected to raise its main interest rate by 25 basis points to its highest level in more than 15 years, as inflation in Britain remains above target and economists see room for further tightening.

9/18/2023

US National Debt Hits Record $33 Trillion as Leaders Debate Raising Debt Ceiling Again

The US national debt has reached a record high of $33 trillion, prompting the need for leaders to decide whether to raise the debt ceiling, as inflation continues to rise and there is a looming government shutdown.

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Posted 8/22/2023, 4:16:00 PM

Why inflation makes Britain's debt the costliest among rich economies

cnn.com

Relevant topic timeline:

8/19/2023

The amount Britain owes exceeds its GDP for the first time since 1961—and credit-rating agencies are watching

8/22/2023

Public borrowing below forecasts despite July rise

8/25/2023

Household debt is at an all-time high, but 2008 was still worse, report finds

8/25/2023

'Mind-blowing' US debt binge amid high interest rates is threatening financial stability, Larry McDonald says

9/2/2023

Higher cost of servicing debt putting Canadian government in a bind

9/12/2023

UK Unemployment Rises as Job Vacancies Dip, But Wages Keep Growing

British pay growth hits a record high, potentially leading the Bank of England to raise interest rates again, despite a cooling labor market with rising unemployment and falling job vacancies.

9/14/2023

UK Interest Rates Set to Hit 15-Year High as BoE Battles Inflation

9/18/2023

US National Debt Hits Record $33 Trillion as Leaders Debate Raising Debt Ceiling Again