Bob’s Rant : Borrowing Billions: The UK's Debt Spiral Under Rachel Reeves

Rachel Reeves' economic stewardship stands at a critical crossroads as the UK plunges deeper into a fiscal nightmare. June 2025's borrowing figures tell a devastating story: £20.7 billion borrowed in a single month—the second highest June figure since records began in 1993—and a shocking £6.6 billion increase from the previous year.

This isn't an isolated incident. The government consistently overshoots borrowing projections, with the financial year ending March 2025 exceeding OBR forecasts by a staggering £14.6 billion. Despite these alarming trends, the Chancellor clings to her fiscal rules while ignoring the economic reality. Her promise that growth will solve everything rings hollow as the UK economy contracted for two consecutive months this spring.

The debt service burden has become a financial black hole, consuming £111 billion annually—over 8% of government spending. Most troubling is that 77% of current borrowing merely services existing debt, creating a vicious cycle that Reeves appears unwilling to address honestly. Her autumn budget, which raised employer national insurance by £25 billion, was meant to stabilize finances but instead strangles businesses and consumer confidence.

Political U-turns on winter fuel payments and disability benefits have blown a £6 billion hole in her budget, while her refusal to consider wealth taxes raises questions about whose interests she truly serves. The OBR's projection of a potential £30 billion shortfall against her fiscal rules should sound alarm bells, yet the Chancellor remains dogmatically committed to a failing strategy.

As the UK's debt-to-GDP ratio climbs to 96.3%, levels not seen since the 1960s, working families face the prospect of "austerity on steroids" unless Reeves acknowledges these challenges and develops a more realistic approach. The question remains: will she recognize the looming economic catastrophe before it's too late?

Chapters

• 0:00 UK's Record-Breaking Borrowing Figures

Transcript

Speaker 0: 0:00

Chancellor Rachel Reeves' handling of the UK's spiralling borrowing figures is a masterclass in fiscal mismanagement. A reckless gamble that threatens to plunge the nation deeper into a debt quagmire. Today's news lays bare the grim reality. Public sector net borrowing for June 2025 soared to £20.7 billion, a staggering £6.6 billion higher than last year and the second highest June figure since records began in 1993. This isn't just a blip. It's a neon warning sign of a government careening toward financial ruin. Under Reeves' watch, the Office for Budget Responsibility projected £143 billion in borrowing for the 2025-26 financial year, a figure already dwarfed by the trajectory of overshoots reported monthly. April's borrowing hit £20.2 billion, £2.3 billion above forecasts and February's £10.7 billion overshot predictions by £4.1 billion. The financial year ending March 2025 saw borrowing reach £151.9 billion, £14.6 billion more than the OBR's already grim estimate. Yet Reeves clings to her non-negotiable fiscal rules balancing day-to-day spending with revenue by 2029-30 and reducing debt as a share of GDP, while the numbers scream that her strategy is crumbling. What's most galling is the Chancellor's apparent denial of the crisis, claiming economic growth will save the day, despite the UK economy shrinking for two consecutive months in April and May 2025. Her autumn budget, which hiked employer national insurance contributions by £25 billion, was sold as a stabilising force, yet it's strangling businesses and sapping consumer confidence. The OBR warns of a potential £30 billion shortfall against her fiscal rules, exacerbated by global trade uncertainties and rising borrowing costs. Yet Reeves doubles down, refusing to revisit her ironclad constraints.

Speaker 0: 2:18

The cost of servicing the national debt is a fiscal black hole, swallowing £111 billion annually, over 8% of government spending and nearly 4% of GDP. A jaw-dropping 77% of this year's borrowing is earmarked for interest on past debts a vicious cycle that Reeves seems content to perpetuate. Her response A half-hearted nod to potential tax heights or spending cuts, while ruling out further borrowing or broad tax increases, boxing herself into a corner where public services face the axe. The Institute for Fiscal Studies rightly calls her out for this self-inflicted trap, noting that easy or risk-free options are in short supply. Easy or risk-free options are in short supply.

Speaker 0: 3:04

Reeves' U-turns, like backtracking on winter fuel payment cuts and disability benefit reforms, have blown a £6 billion hole in her budget, further eroding her credibility. Her refusal to consider wealth taxes, despite pressure from Labour's own ranks, smacks of pandering to business elites, while ignoring the working families she claims to champion. Shadow Chancellor Mel Stride aptly calls her borrowing alarming, accusing her of spending money she doesn't have. The Chancellor's mantra of borrowing to invest is a hollow promise when the OBR itself admits her measures will barely nudge GDP growth by 1.5% over 50 years, potentially turning negative by 2028. Her policies are crushing growth, fuelling inflation and burdening taxpayers, with a debt interest bill projected to hit £130 billion.

Speaker 0: 3:59

Reeves' failure to confront this head-on, hiding behind trade deals and infrastructure promises that won't materialise for years, betrays a lack of vision and courage. As the UK's debt-to-GDP ratio climbs to 96.3%, levels not seen since the 1960s, reeves' legacy risks being one of fiscal chaos. Her dogmatic adherence to flawed rules, coupled with a refusal to adapt to a deteriorating economic outlook, is steering Britain toward austerity on steroids. Working families already reeling from tax hikes and stagnant growth will pay the price for her hubris. This isn't leadership, it's a slow-motion disaster.