Managing public debt in the UK

Journal article


McManus, R., Ozkan, G. and Trzeciakiewicz, D. 2022. Managing public debt in the UK. CESifo Forum.
AuthorsMcManus, R., Ozkan, G. and Trzeciakiewicz, D.
Abstract

The Covid-19 pandemic that emerged in early 2020 quickly turned into an economic crisis of unprecedented proportions. The UK, one of the worst affected countries, suffered 9.9 per cent drop in output in 2020, the deepest recession in 300 years.4 The required public health expenditure in the fight against the coronavirus and the ballooning cost of support programs to both the households and businesses led to a sharp rise in government spending.5 When combined with the significant drop in tax revenues following the contraction in economic activity, the surge in spending pushed the debt burden to levels previously unseen in peace times.

This article assesses the evolution of government debt in the UK both in recent past as well as over the last century to put the current escalation in indebtedness into context. We then present the sources of debt consolidation both in general, and in the UK context. Finally, we provide an evaluation of likely scenarios for debt management in the UK in its transitioning to a post-Covid-19 world.

KeywordsEconomics; COVID-19; Pandemic; Coronavirus; Government debt; United Kingdom; UK
Year2022
JournalCESifo Forum
Publisherifo Institute
ISSN2190-717X
Related URLhttps://www.cesifo.org/en/publication/cesifo-forum
Publication process dates
Deposited10 Jan 2022
Accepted01 Dec 2021
Accepted author manuscript
License
All rights reserved
Output statusIn press
Additional information

Reproduction permitted only if source is stated and copy is sent to the ifo Institute.

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