Public debt is near multi-decade highs in both France and the U.K., where recent elections have brought new leadership. Government spending and budget deficits remain above pre-pandemic levels, economic growth is sluggish, borrowing costs have risen, and demands on public funds are increasing.<\/p>\n
Economists suggest that fiscal restraint\u2014through reduced spending or higher taxes\u2014will be necessary. However, political leaders have not prepared voters for such measures, instead promising bold new spending plans.<\/p>\n
In France, the far-right National Rally, expected to gain the most seats in parliament, has proposed tax cuts and reversing the pension age increase, while the left-wing New Popular Front has an even more ambitious agenda, including price freezes and minimum wage hikes, without addressing the deficit. France\u2019s government-bond yields have surged, and Standard & Poor\u2019s downgraded its sovereign debt rating in May.<\/p>\n