According to The Times, the long-term borrowing costs in the UK have reached their highest level in 27 years, putting pressure on UK Chancellor Rachel Reeves.
The UK's financial situation continues to deteriorate, and the future looks bleak.
Experts analyze that high long-term national borrowing costs can have multiple negative impacts on the economy:
1. Increased fiscal pressure
High interest expenses will significantly increase the fiscal burden, compressing spending in areas such as public services, education, and healthcare, leading to a decline in the level of social security.
2. Economic growth is hindered
Debt pressure may suppress companies' willingness to invest, reducing job opportunities and employment, forming a "debt-consumption-investment" vicious cycle.
3. Debt risks are exacerbated
Excessive borrowing may lead to a debt turning point, where the cost of debt servicing exceeds income growth, triggering the risk of debt default, lowering the country's credit rating, and increasing financing costs.
4. Monetary policy is limited
High borrowing costs may limit the government's ability to stimulate the economy through monetary easing policies, exacerbating economic downturn pressures.
Original: www.toutiao.com/article/1842190339120128/
Statement: This article represents the views of the author himself.