Part 4/10:

Inflation plays a dual role in this equation. It does not increase the debt amount owed but can drive GDP growth, making it easier for governments to manage their debt burdens. However, with UK inflation tapering around 3%, and projections for economic growth lingering at about 1%, a dangerous imbalance emerges. With current debt interest rates outpacing the growth from inflation and GDP, the UK government could see its debt ratio increase, leading to a spiral of financial instability.