Second highest borrowing for May on record
Chancellor Rachael Reeves’ £17.7bn of borrowing last month was second highest on record for May, the ONS reports.
Having been appointed in July last year when the Labour Party were voted into power, Reeves has borrowed £51.4bn in the first four months of the fiscal year to June – £4.7bn more than the Office for Budget Responsibility had forecast.
This eye-watering use of the national credit card is all the more staggering when one recalls how Reeves and Starmer made such a big deal about the “£22bn black hole” left by the Tories.
Economist predicts doubling of tax
Speaking before this month’s Business Breakfast in Liverpool, economist Tom Pugh predicted tax receipts will rise from £10bn to £20bn. Pugh spoke of Reeves leaving herself a very small amount of headroom, a problem exacerbated by movements in interest rates since the last fiscal statement.
He added: “Given the choices that we’ve seen previously, if there’s fiscal consolidation that needs to be done, I think it’s more likely we see tax rises than spending cuts.”
Piling on the pressure
After increasing employers’ national insurance obligations in April, putting huge pressure on small and medium-sized businesses, all this extra borrowing is all adding to the national debt, which currently stands at 96.4% of GDP, or in cash terms, around £2.8 trillion – a figure that for all intents and purposes is impossible to pay off.
Actual inflation
The debt-based financial system we are all forced to operate in, where the government sells bonds to its central bank, which then prints the money to buy said bonds, is unravelling at pace. The government, indeed successive governments, have been telling the British people that inflation is the capital markets raising prices, but this is just a symptom of the truth.
The truth is that the printing of the money is the insidious, secret tax which is part and parcel of Keynesian economic theory: more fiat currency chasing fewer goods is the root cause of why consumer prices have risen steadily since the invention of the debt-based financial system. This proliferation is now reaching a critical point where wages are struggling to keep pace. The only real beneficiaries are people who own assets.
Rich get richer
So, for all their rhetoric on fairness and social justice, all the Labour Party is doing is ensuring the rich get richer.
