I think it is worth reading the whole article carefully before putting your house on the market, OP. Here it is for anyone who can't get past the paywall.
Labour risks being forced to seek emergency help from the International Monetary Fund (IMF) as Britain lurches toward a debt crisis, leading economists have warned.
In a warning shot to Labour leadership hopeful Andy Burnham, the former IMF chief economist Ken Rogoff said a major UK debt crisis before the end of the decade was now more likely than not.He said repeated shocks including Covid, Russia’s invasion of Ukraine and the Iran war had left the country exposed to a “more than 50:50 chance” of a crisis by 2030 that would force Britain into massive tax rises or spending cuts.
If the shock led to the Bank of England losing control of inflation, the Harvard economics professor said the UK would probably need a bigger rescue package with “support” from the Washington-based lender of last resort.
He said: “In a situation like this, the IMF would be called in for technical support.”Rachel Reeves has increased debt substantially since Labour took power.
The Chancellor used her maiden Budget to authorise £70bn of public spending, only half of which was funded by a record tax raid on households and businesses.
It means Britain’s overall debt pile is on course to rise to £3tn this September, as the overall debt share heads towards 100pc of GDP.
Sir Charlie Bean, a former official at the Office for Budget Responsibility (OBR), warned that IMF intervention was now a “material risk”.
He added: “I think the relevant point for the Government is just that it’s no longer a negligible probability, it’s something they need to factor in. There is a possibility.”
The warnings by two prominent US and British economists underline the growing concern over Britain’s fiscal health amid the highest inflation and borrowing costs in the G7.
Oliver Blanchard, another former IMF chief economist, said developed countries such as the UK and the US faced fiscal challenges.
He added: “I think it may take at least a mini fiscal crisis, with some failed auction, or spreads increasing, to get some governments to do what they need to do.”Investors have become nervous about the outcome of a Labour leadership challenge, with Andy Burnham, the mayor of Manchester, fighting a by-election in Makerfield on June 18.
Mr Burnham has previously said he does not want Britain to be “in hock to the bond market”.
He has also signalled he would spend more on social care and nationalise swathes of the economy.
However, Mr Burnham has since sought to calm investors’ nerves by saying he would stick to the tax and spending rules imposed by Ms Reeves and stepped back from a pledge to borrow to fund extra defence spending.