Best of the Spectator Reality Check: the £100 billion problem nobody talks about
Feb 22, 2026
Paul Johnson, economist and former director of the Institute for Fiscal Studies, now Provost at The Queen’s College, Oxford. He discusses Britain’s soaring debt interest, how it already rivals defence spending. He explains why debt keeps rising, the role of weak growth and spending choices, the risks of monetising deficits, and the hard fiscal choices looming around 2028–29.
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Policy Choices, Not Fate, Drove Debt Rise
- Poor economic growth and repeated decisions to spend more than tax receipts explain rising debt since 2000.
- The UK's debt position moved from low to relatively high by OECD standards due to policy choices.
Inflation Helps But Is Not A Cure
- Lower inflation reduces interest costs and index-linked gilt payments and can ease pension and benefit upratings.
- But intentionally inflating debt away has serious trade-offs and isn't a recommended strategy.
Short-Term Measures May Change Expectations
- Budget measures to cut energy support and freeze fares might lower headline inflation by ~0.5 percentage points this year.
- Their lasting effect depends on whether they change medium-term inflation expectations.