Britain, once an imperial power, is now struggling financially.
The recent revelation that the actual fiscal deficit exceeds 22 billion pounds is undoubtedly a bombshell, making the world full of concerns about the UK's economic situation and future direction.
Faced with such financial difficulties, people can't help but wonder: How did Britain get to this point?
From a historical perspective, the 2008 international financial crisis and the economic rescue plan during the COVID-19 pandemic have undoubtedly dealt a heavy blow to the UK's fiscal situation.
In order to save the financial industry and support the job market, the British government had to borrow heavily, which directly led to the public sector debt level soaring to an unprecedented high.
High debt is not the only problem facing the UK.
The challenges in economic fundamentals are equally severe.
Although the UK's GDP grew by 0.6% month-on-month in the second quarter of this year, showing a certain degree of recovery, the decline in unemployment and stable inflation rate did not give the UK enough breathing room.
Due to long-term insufficient labor productivity and weak investment, the British government has attempted to improve infrastructure construction and improve the problem of insufficient YL resources by increasing public investment.
But government borrowing reached 3.1 billion pounds in July, the highest level in the same period in the past three years, which also reflects the financial constraints of the British government.
The financial situation of local governments is even more worrying.
Several important cities such as Nottingham and Birmingham have experienced substantial "bankruptcy" one after another, which not only affects the quality and efficiency of statutory service projects, but may also lead to the temporary suspension of some welfare improvement projects and large-scale infrastructure construction.
Negative impacts such as poor management by local governments, poor local economic conditions, and low levels of public services have further affected investor confidence and residents' sentiment.
What impact will all this have on the UK?
Britain’s credibility and influence on the international stage may be called into question.
The economic stability and future development prospects of a country with a serious fiscal deficit will be closely watched and carefully evaluated by the international community.
Secondly, internal economic pressure will increase further.
The government needs to find new sources of funds to fill the fiscal deficit, which may include measures such as increasing taxes and cutting spending, but these measures may inhibit economic growth and form a vicious cycle.
Faced with these challenges, the Starmer government is working hard to find solutions.
They are targeting the wealthy, with plans to scrap preferential treatment for high-net-worth foreigners living in the UK; end welfare benefits for the private equity industry and impose VAT on private school fees.
The measures are intended to ease fiscal pressures by increasing taxes on wealth-related income.
At this critical moment, the UK not only needs to solve short-term fiscal problems, but also needs to think deeply about how to achieve long-term stable economic development.
Improving labor productivity, enhancing investment attractiveness, and optimizing the structure of public spending are all major issues that the British government will have to face in the future.
The fact that the UK's actual fiscal deficit exceeds £22 billion reveals the fragility and deep-seated problems of the country's economy.
It will not only have a significant impact on the UK's domestic policies, but may also change its position and role in the international economy.
It is crucial for investors, policymakers and the general public who pay attention to international economic trends to understand the reasons behind this phenomenon and its possible consequences.
If you think it helps you, please follow us @加密航海家飞鱼
