Belfast Telegraph

Government borrowing poses real and present danger to economy, Bank official warns

Richard Sharp said the UK is “heavily indebted” and “suffering from anaemic growth”.

Soaring Government borrowing poses a serious threat to the British economy, putting it at risk of a Venezuela style crash, a Bank of England official has warned.

Richard Sharp, a member of the Bank’s Financial Stability Committee, told an audience at University College London on Thursday that the UK is “heavily indebted” and “suffering from anaemic growth”.

Pointing to the fact that Britain has racked up an additional £1 trillion of debt since 2008, he added: “What does seem to me to be apparent is that we have a debt level which gives us limited capacity for national manoeuvre.

“It is important to remain aware of the fact that if we lose our fiscal space, financial stability is jeopardised.”

Mr Sharp suggested that the level of borrowing the Government has subjected the country to means Britain could be at risk of a Venezuela style collapse.

“When I started in finance Venezuela was a AAA credit … Venezuela is now in default.

“It is important to me that we recognise that the UK’s debt levels may be stretched given the risk that unexpected shocks may materialise,” he added.

His comments come a week after Chancellor Philip Hammond’s Budget, in which he pledged to splurge an extra £25 billion, despite Brexit contributing to a rapidly deteriorating economic outlook.

Jeremy Corbyn’s Labour Party has also promised to borrow an extra £250 billion to implement policies such as renationalisation and pay rises for public sector workers.