The Impact of Rapid National Debt Growth in the UK and Its Effects on the Global Economy
Over the past twenty years, the national debt of the United Kingdom has experienced a significant surge, reaching almost the entire size of its economy.
An analysis conducted by the renowned economic firm Oxford Economics shows that during this period, the country’s debt has nearly tripled, from 2005 to 2025.
Such rapid accumulation of debt poses serious challenges to future economic development: experts warn that without immediate action, the country may enter an ‘uncertainty spiral’—where high debt servicing costs and slow economic growth force the government to increase taxes, which further deteriorates the economic situation and leads to even higher fiscal burdens.
According to The Telegraph, as of August, UK’s debt stood at £2.9 trillion ($3.81 trillion), roughly equivalent to the entire economic output.
This costs taxpayers over £100 billion annually in interest payments alone, intensifying financial strain.
Compared to the UK, only the USA and Spain over the last two decades have accumulated debt at similar rates, whereas European countries like Germany, Sweden, Switzerland, and the Netherlands have managed to reduce their debt relative to their economic size.
Countries outside Europe, such as Canada and Israel, have also successfully decreased their debt levels.
Globally, however, total debt approaches 100% of the world’s GDP, introducing significant risks to financial stability.
High inflation rates, depleted reserves, and uncertain economic prospects further complicate the outlook.
The annual meetings of the IMF and World Bank in Washington have just concluded, where these pressing issues were discussed.
Economists warn of possible economic decline, and analysts from Ukraine and beyond underline that the future of the global economy largely depends on debt risk management and governments’ ability to adapt to new challenges.