Against this backdrop, it's no surprise that total government borrowing (which has already hit £2 trillion and is greater than 100 per cent of GDP) this year is expected to top £300bn.
Once upon a time, such towering debts would have been considered dangerous and their owners reckless. The cost of servicing high borrowing would be crippling; taxes would have to be raised and spending cut, stymying growth and causing tax receipts to fall. The World Bank declared that when a nation’s debt reached 77 per cent of GDP, its economic growth would inevitably start reversing. Now, however, because they are easily affordable, debt mountains are no longer feared – not even when they exceed 100 per cent of GDP – as long as interest rates can be kept ultra-low, economic growth is greater than the rate of interest, and the government can print its own money. The highly indebted US and Japan bear testament to this.