By Rob Starr, Content Manager, Big4.com
Across Europe, public debt levels stand at their highest levels in peacetime, with the total stock of government debt outstanding across the 27 EU economies having risen above €10 trillion earlier this year. This averages out at around €21,000 (around £17,000) for every person in the EU, according to analysis in a new report from PwC published today.
The UK does not have the worst public debt position, with net government debt per person being the third lowest in the G7 (only Germany and Canada are lower ). But the UK has problems of its own in terms of the overhang from high household debt and a budget deficit that has fallen since 2010, but still has a long way to go before it reaches sustainable levels as last week’s Autumn Statement made clear.
The PwC report also highlights the potential interactions between public and private sector debt and deleveraging, not least for the UK where household debt is relatively high by EU standards. These impacts on growth are highest in Greece, the UK and Portugal.
John Hawksworth, chief economist at PwC comments:
“The relatively high potential exposure of the UK to household deleveraging is due in particular to the large share of consumer spending in UK GDP, which means declines in consumer demand have disproportionately larger impacts on the economy,” he says.