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UK Political Chaos - October 2022

The resignation of Liz Truss as Prime Minister last week has thrown the UK government into chaos, with many wondering who will take her place and how this will impact on the Brexit negotiations.

According to figures from The Institute for Fiscal Studies (IFS), UK’s public sector net debt is forecast to reach 86% of GDP by 2021-22 - up from 80% in 2017-18. This is largely due to increased spending on health, pensions and social care, as well as higher interest payments on government debt. The IFS predicts that the UK's public sector borrowing will rise from £45.2 billion in 2017-18 to £79.1 billion by 2022-23, which will put further pressure on taxpayers and the economy at large.


Some economists are warning of a negative economic outlook for the UK in the years ahead. In their most recent survey, the Bank of England cut its growth forecasts for 2018 and 2019 by 0.5 percentage points to 1.4% and 1.8%, respectively - citing weaker household spending and business investment as key reasons behind this downward revision. With so much uncertainty over Brexit negotiations, rising debt levels and low levels of productivity, it seems likely that many Britons will continue to be wary about the country's economic future.



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