So the estimated deficit for this year has been increased, from £175 billion to £178 billion – the biggest deficit ever for the UK government. That’s 12.6% of GDP.
Frankly we’re unlikely ever to pay that off, especially with the government predicting more deficits every year for the foreseeable future, so we’ll be paying interest on that debt forever.
If interest rates go up to 7% (hardly unlikely), we will be paying about £12.5 billion interest each year, just on this year’s borrowing – never mind all the accumulated borrowings from previous years and all the extra debt the government is planning for the future.
That’s about 3% on VAT, forever, just to pay the interest on this year’s deficit.