How Corbynomics would cause economic disaster as Gov told to pay off debts NOW

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Jeremy CorbynGETTY

Jeremy Corbyn miss to increase Government spending

Jeremy Corbyn touted splashing mountainous amounts of cash in his bid to win last month’s election.

But in a stark assessment, the Role for Budget Responsibility (OBR) said the UK must tread carefully to avoid a economic downturn, weak growth and higher interest rates and inflation amid a cocktail of risks.

The watchdog give fair warned Chancellor Philip Hammond about the danger of an unfunded spending binge, as pressure grows on the Government to loosen the purse strings.

Pushing Britain yet into the red now adds to «the longer-term challenges», the OBR said.

It comes as Britain’s straitened tops a record high £1.4trillion, which makes the frugality «much more sensitive» to swings in interest rates and inflations, corresponding to the independent department.

The watchdog commanded: «The budget is still in deficit by two to three per cent of GDP — as it was on the eve of the crisis — and net debt is sundry than double its pre-crisis share of GDP and not yet falling.

«As a result, the public investment capitals are much more sensitive to interest rate and inflation surprises than they were.»

Brexit abandons some of the risks to the public finances, said the OBR.

But added the cost of the divorce note is unlikely to pose a big threat to Britain.

The OBR said: «The new Government must also by the risks posed by Brexit.

«These do not supplant the possible shocks and acceptable pressures that we have already discussed, but they could counterfeit the likelihood and impact of many of them.

«A lot of attention focuses on the possible ‘dissolve bill’, but, while some numbers mooted for it are very large, a one-off hit of this throw would not pose a big threat to fiscal sustainability.»

The watchdog augmented: «More important are the implications of whatever agreements are reached with the EU and other buy partners for the long-term growth of the UK economy, which we do not attempt to predict here.

«If GDP and returns grew just 0.1 percentage points more slowly than projected on the next 50 years, but spending growth was unchanged, the debt-to-GDP command end up around 50 percentage points higher.»

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