RT-Engels: 25-05-2024,

The next British government will inherit a slew of economic problems, and will have to quickly decide how to tackle them, according to a think tank

The UK economy is in a tight spot and the new government which will come to power after the general elections scheduled for July will face the hardest fiscal challenge the country has seen in decades, the Institute for Fiscal Studies (IFS) think tank indicated in a report on Saturday.

According to the analysts, the new administration will inherit three key problems: a debt burden close to 100% of gross domestic product (GDP), high interest rates and low growth. The government, they claim, has “limited headroom” for dealing with these challenges, and will have to decide quickly between several unappealing options.

One option researchers singled out is to implement spending cuts. However, they say this option “will inevitably be painful,” as public services, the Home Office, justice, and local government are already struggling due to scarce funding. Another option is to further raise taxes, but this would also be difficult, given that at their current pace they are already due to hit an 80-year high by 2028-29.

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“The fact that this is only just enough to stabilize debt in five years’ time speaks to the difficulty of the economic and fiscal inheritance awaiting the next government,” the IFS stated.

A third option to deal with fiscal challenges would be to borrow more,

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