EU Study Sees Mounting UK Public Debt - Telegraph

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UK's public debt would surge to 180% of gross domestic product within a decade unless future governments take drastic measures to restore fiscal probity, the Telegraph newspaper reported Thursday, citing a confidential study by the European Commission.

The projection is more than twice the level forecast by the HM Treasury, which expects the debt to peak at around 80% of GDP by 2013.

According to the newspaper, the report is being prepared for the EU finance ministers meeting in Göteborg to be held in October. The focus of the meeting would be strategies to exit stimulus measures and long-term sustainability of EU public finances.

"The figures are based on the assumption that the emergency fiscal support of the last year is withdrawn in an orderly way by 2011, but that there is no further retrenchment thereafter," the newspaper said.

The Commission is concerned that the UK is likely to suffer lasting damage by the crisis and neither its banking or construction will recover quickly.

UK's public debt would surge to 180% of gross domestic product within a decade unless future governments take drastic measures to restore fiscal probity, the Telegraph newspaper reported Thursday, citing a confidential study by the European Commission. (Market News Provided by RTTNews)