Brexit uncertainty fuels concern over UK's ability to respond to economic shocks

A parliamentary committee has raised concerns about the Government's ability to respond to economic shocks given the high level of public debt and uncertainty caused by Brexit.

The Public Accounts Committee (PAC) said UK Government debt is too high relative to the performance of the economy at £1.7 trillion and 86% of GDP, as of March last year.

Combined with rising levels of personal debt, productivity and growth forecasts being revised down, and uncertainty about the public finances over Brexit, this may limit ministers' ability to deal with shocks and uncertainty.

Labour MP and Public Accounts Committee chair Meg Hillier. (PA)
PAC chair Meg Hillier said she was "concerned" about the Government's capacity to respond to an economic shock (PA)

PAC chairwoman Meg Hillier said: "There is little wiggle room in the UK's public finances. Government accepts public sector debt is too high yet it expects to increase the amount it will borrow by some £55 billion over the next few years.

"Taken with the continued uncertainty over the financial impact of Brexit and rising levels of personal debt, I am concerned about Government's capacity to respond to future shocks to the economy.

"In this context it is vital that as far as possible Government fully identifies the risks ahead and is open with Parliament and taxpayers about decisions it takes that affect the public purse."

A spokesman for HM Treasury said: "We have a strong, resilient economy with record employment, and we have reduced the deficit by three-quarters.

"But we are not complacent, and our balanced approach is getting debt falling while supporting public services and investing to build an economy that is fit for the future."

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