09 JULY 2026
10 Downing Street will soon welcome its seventh Prime Minister in just a decade; an unprecedented pace of political turnover in modern Britain.
While Brexit and the pandemic are often cited as the key drivers of this instability, the real cause is the UK’s deteriorating fiscal position.
The chart below compares the annual budget deficit (blue bars) with the stock of government net debt as a percentage of GDP (red bars).
Although deficits have been a persistent feature since the 1970s, total debt remained broadly stable at 20–30% of GDP for several decades.
This changed following the 2008 financial crisis, and then again after Covid, pushing net debt to around 80% of GDP and leaving deficits entrenched around -5%.
The consequence has been prolonged economic stagnation, rising social pressures and persistent political churn in Westminster.
A credible, growth-led strategy (rather than renewed austerity) may offer the new Prime Minister the best chance of breaking this cycle.
Whether it can be delivered remains to be seen.
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