Lord Jim O’Neill, an economist and former Goldman Sachs executive who advised Andy Burnham, has stated that the cost to taxpayers of paying interest on UK government debt is “increasingly crazy”. He told LBC’s Nick Ferrari that debt interest payments significantly outweigh the defence budget.
According to City AM analysis, the UK government has paid over £200bn in debt interest costs since Labour came to power in 2024. When asked if borrowing approximately £77bn since April was sustainable, O’Neill responded, “it’s not.”
The government is forecast to spend around £110bn on debt interest costs this year, with projections indicating this bill could rise to £137bn within years. O’Neill urged Prime Minister Burnham to consider scrapping the triple lock pension, which guarantees state pension increases based on inflation, wage growth, or 2.5 per cent, whichever is highest.
International Monetary Fund managing director Kristalina Georgieva has also warned governments about the necessity of reducing high debt levels, following a market rout that led to soaring bond yields.