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UK debt set to hit £1 trillion

The Chancellor's pre-budget report today contained many shocks a few surprises but news that UK debt will hit £1 trillion over next few years has surprised many in the market. Government borrowing this year will be the region of 70 billion and rise to around 120 billion next year. Those who might expect borrowing to disappear after 2009/10 may be surprised to learn that there will be at least another three years of substantial borrowings in the UK.

This extra debt now takes the UK into unseen territory and is by far and away the largest amount of government debt ever seen in the UK. While it has to be recognised that we are in a situation which nobody has experienced for around 80 years there is no doubt that the debt levels being talked about will take many years of taxpayers to repay.

At some point there will need to be increases in tax, reductions in public spending and another round of cost-cutting exercises within government. Make no doubt about it, the UK economy is in a mess and while the government is doing its best to alleviate the problem it will not be a short-term fix.

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