hat should savers do now?
In Britain, the national debt has risen above 100 per cent of GDP, and so far this year, the government has borrowed as much as it did in the aftermath of the crash of 2008 and 2009. We can’t know where the deficit will end up, because that 100 per cent figure is made larger by the collapse in GDP, but it will be a five-year slog to get the deficit down to some sort of balance.
It seems reasonable to expect national debt to settle down (or rather up) at somewhere between 100 per cent of GDP, if there is a strong economic rebound, and 110 per cent – or even more – if there isn’t. This will be the highest debt-to-GDP ratio since the 1960s, when we were paying off the debts incurred during the Second World War.