UK Debt Hangover Ties Next Government’s Hands, Whoever Wins
- Legacy of Covid, cost-of-living crisis curbs spending power
- Tories and Labour laid fiscal trap that awaits new government
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Whichever political party wins the UK general election on July 4, a massive debt hangover is in store, severely limiting what the poll-leading Labour Party or governing Conservatives can do in office.
The fiscal straight-jacket is a product of four years of crisis spending — first to rescue jobs and businesses during the Covid outbreak, and then to help families cope with the cost-of-living shock after Russia’s invasion of Ukraine. While Rishi Sunak was the author of the free-spending response — as chancellor during the pandemic and later as prime minister — it’s a problem for Labour, too, because they backed him all the way.