Fiscal black holes are sucking cash out of the economy

 Now Rachel has left, there's a lot less talk about Black Holes from Denis Healey.

Rachel liked to refer to budgeting gaps as Black Holes in order to point the finger at the Tories.

But the real problem if the huge £3 TRILLION government debt pile has now actually become a black hole.  It has grown so large that the gravitational pull from the collapsing debt pile is now dragging cash out of the economy into the black hole. It's a runaway reaction where cash cannot escape.

On the 20th July 2026 Burnham became Prime Minister. 

As of today 30 year gilts are trading at the highest yield since 1998. The key difference is that the debt-to-GDP ratio in 1998 was just 42% compared to 94% of GDP now.

Public Sector Net Financial Liabilities are now a staggering £2.6 TRILLION on top of the £3 TRILLION debt pile. That's for the generous final salary public sector pensions.

Of the Black Hole sized £3 TRILLION debt, roughly 1/3rd is 10 year gilts and 2/3rds are 30 year gilts.

So since Burnham came to power just a few months ago that means an extra £4.4 BILLION EXTRA in interest payments on 10 year gilts and an EXTRA £4.8 BILLION per year on 30 year gilt interest payments. 

So when Burnham came to power Labour were squandering £165 BILLION per year on interest payments to the bond markets and in a little under 3 months that has increased to £174.8 BILLION.

To put that in perspective the UK benefits bil excluding State Pensions was £133 BILLION.....and all income tax raised is £330 BILLION.

Labour are borrowing money every month just to pay  interest to the Black Hole. It is literally just sucking in cash.  Of course borrowing money to feed the Black Hole increases the size of the Black Hole.

We have reached the point of singularity where it is impossible to escape the Black Hole.



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