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If the UK economy was a business would the banks call in the debt?

Gross domestic product (GDP) is an integral part of the economic forecasting system in the UK and around the world and one which forms the basis of many new economic forecasts. However, while GDP in the UK has been falling as the recession grabs hold, it is also interesting to compare Gross domestic product against the national debt.

While officially national debt has been quoted at around £800 billion, many people believe the real figure is in fact well over £1 trillion. This figure is around 60% of GDP in the UK which effectively means a massive portion of UK government income is being used to finance existing debts. If this was a company would the banks have called in the substantial debt and would the company be dead?

The truth is that while the UK government will inevitably increase direct and indirect taxes for the foreseeable future, if the UK economy was a company it would be nearly impossible to push through the kind of price increases (i.e. tax rises) which are required. The government and regulators preach to us about fiscal responsibility and handling budgets when ultimately the UK stands on the edge of bankruptcy if it was a company.

This is the brutal truth of life in the UK and the economic situation we currently find ourselves in.

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